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, 2020

OR

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

For the transition period from to

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)

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

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

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

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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 ☒

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

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

As of August 6, 2020, there were 97,405 of the registrant’s Class A units (2,922,151 Depositary Receipts) of limited partnership issued and outstanding and 23,134 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, 2020 and December 31, 2019	4
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2020 and 2019	5
	Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2020 and 2019	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosure	46
Item 5.	Other Information	46
Item 6.	Exhibits	46
SIGNATURES		48

2

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, 2019 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, 2019.

The results of operations for the three and six month periods ended June 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

3

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2020		2019
ASSETS		(Unaudited)
Rental Properties	$	271,417,401	$	278,363,988
Cash and Cash Equivalents		15,396,023		7,546,324
Rents Receivable		1,014,905		484,610
Real Estate Tax Escrows		437,502		446,781
Prepaid Expenses and Other Assets		5,116,550		6,021,544
Investments in Unconsolidated Joint Ventures		1,453,894		1,430,402
Total Assets	$	294,836,275	$	294,293,649
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable		284,402,031		281,771,246
Notes Payable		17,000,000		18,000,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		20,129,903		19,970,089
Accounts Payable and Accrued Expenses		3,597,414		4,274,266
Advance Rental Payments and Security Deposits		7,428,945		8,101,835
Total Liabilities		332,558,293		332,117,436
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 121,756 and 121,978 units outstanding in 2020 and 2019 respectively		(37,722,018)		(37,823,787)
Total Liabilities and Partners’ Capital	$	294,836,275	$	294,293,649

See notes to consolidated financial statements.

4

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenues
Rental income	$	15,646,814	$	14,886,423	$	31,900,244	$	29,654,899
Laundry and sundry income		112,292		104,980		234,446		218,649
		15,759,106		14,991,403		32,134,690		29,873,548
Expenses
Administrative		512,195		626,180		1,096,853		1,238,938
Depreciation and amortization		4,601,617		3,590,240		9,167,084		7,272,918
Management fee		615,541		597,197		1,264,534		1,187,806
Operating		1,291,781		1,125,813		2,960,183		3,009,831
Renting		128,608		242,515		325,479		424,573
Repairs and maintenance		2,049,174		2,287,313		4,135,392		4,231,544
Taxes and insurance		2,115,721		1,942,998		4,396,262		3,977,104
		11,314,637		10,412,256		23,345,787		21,342,714
Income Before Other Income (Expense)		4,444,469		4,579,147		8,788,903		8,530,834
Other Income (Expense)
Interest income		52		90		159		269
Interest expense		(3,423,583)		(3,133,439)		(6,873,908)		(6,133,728)
Income from investments in unconsolidated joint ventures		444,113		513,406		918,680		1,062,345
Other expense		—		(194,960)		—		(194,960)
		(2,979,418)		(2,814,903)		(5,955,069)		(5,266,074)
Net Income	$	1,465,051	$	1,764,244	$	2,833,834	$	3,264,760
Net Income per Unit	$	12.03	$	14.40	$	23.26	$	26.61
Weighted Average Number of Units Outstanding		121,756		122,483		121,816		122,710

See notes to consolidated financial statements.

5

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNER’S CAPITAL

(Unaudited)

	Units						Partners’ Capital
	Limited		General		Treasury		Limited				General
	Class A	Class B	Partnership	Subtotal	Units	Total	Class A		Class B		Partnership		Total
Balance January 1, 2019	144,180	34,243	1,802	180,225	55,839	124,386	$	(28,527,352)	$	(6,741,825)	$	(354,833)	$	(35,624,010)
Distribution to Partners	—	—	—	—	—	—		(1,881,955)		(446,964)		(23,524)		(2,352,443)
Stock Buyback	—	—	—	—	1,995	(1,995)		(2,644,552)		(628,044)		(33,055)		(3,305,651)
Net Income	—	—	—	—	—	—		2,611,808		620,304		32,648		3,264,760
Balance June 30, 2019	144,180	34,243	1,802	180,225	57,834	122,391	$	(30,442,051)	$	(7,196,529)	$	(378,764)	$	(38,017,344)
Balance January 1 , 2020	144,180	34,243	1,802	180,225	58,247	121,978	$	(30,287,245)	$	(7,159,715)	$	(376,827)	$	(37,823,787)
Distribution to Partners	—	—	—	—	—	—		(1,870,428)		(444,226)		(23,380)		(2,338,034)
Stock Buyback	—	—	—	—	222	(222)		(315,220)		(74,870)		(3,941)		(394,031)
Net Income	—	—	—	—	—	—		2,267,068		538,428		28,338		2,833,834
Balance June 30, 2020	144,180	34,243	1,802	180,225	58,469	121,756	$	(30,205,825)	$	(7,140,383)	$	(375,810)	$	(37,722,018)

See notes to consolidated financial statements.

6

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2020		2019
Cash Flows from Operating Activities
Net income	$	2,833,834	$	3,264,759
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		9,167,084		7,272,918
Amortization of deferred financing costs		119,835		225,494
(Income) from investments in joint ventures		(918,680)		(1,062,345)
Allowance for doubtful accounts		729,653		323,728
Change in operating assets and liabilities
Proceeds from unconsolidated joint ventures		5,000		770,000
(Increase) in rents receivable		(1,259,948)		(166,880)
(Decrease) Increase in accounts payable and accrued expense		(676,850)		474,466
Decrease in real estate tax escrow		9,279		49,347
Decrease (Increase) in prepaid expenses and other assets		188,556		(62,380)
( Decrease) Increase in advance rental payments and security deposits		(672,890)		822,139
Total Adjustments		6,691,039		8,646,487
Net cash provided by operating activities		9,524,873		11,911,246
Cash Flows From Investing Activities
Distribution in excess of investment in unconsolidated joint ventures		1,060,585		1,597,152
(Investment) in unconsolidated joint ventures		(10,585)		(19,152)
Improvement of rental properties		(1,504,059)		(1,715,987)
Net cash provided by (used in) investing activities		(454,059)		(137,987)
Cash Flows from Financing Activities
Payment of financing costs		(136,325)		(235,147)
Proceeds of mortgage notes payable		3,781,877		679,000
Payment of note payable		(1,000,000)		(2,000,000)
Principal payments of mortgage notes payable		(1,134,602)		(1,028,035)
Stock buyback		(394,031)		(3,305,651)
Distributions to partners		(2,338,034)		(2,352,443)
Net cash (used in) financing activities		(1,221,115)		(8,242,276)
Net Increase in Cash and Cash Equivalents		7,849,699		3,530,983
Cash and Cash Equivalents, at beginning of period		7,546,324		9,059,901
Cash and Cash Equivalents, at end of period	$	15,396,023	$	12,590,884

See notes to consolidated financial statements.

7

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

(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 29 properties which include 21 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,892 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40 - 50% interest in 7 residential and mixed use properties consisting of 688 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. 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 seven limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership”. Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 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 some investments fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 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

8

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

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

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

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

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).

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

We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the

9

beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

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 $120,000 and $225,000 for the six months ended June 30, 2020 and 2019, 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.

10

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 2020 or 2019 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 2020 or 2019. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2020, 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 0.03%. At June 30, 2020 and December 31, 2019, respectively approximately $15,636,000, and $7,407,000 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 $145,803 and $141,975 for the six months ended June 30, 2020 and 2019, 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, 2020 and 2019 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, 2020, the Partnership and its Subsidiary Partnerships owned 2,892 residential apartment units in 25 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, 2020, 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 seven residential and mixed use complexes (the “Investment Properties”) at June 30, 2020 with a total of 688 apartment units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

11

Rental properties consist of the following:

	June 30, 2020		December 31, 2019		Useful Life
Land, improvements and parking lots	$	86,864,868	$	86,693,759	15	-	40	years
Buildings and improvements		253,113,482		252,896,183	15	-	40	years
Kitchen cabinets		17,633,302		17,376,841	5	-	10	years
Carpets		11,317,057		10,976,972	5	-	10	years
Air conditioning		573,389		573,389	5	-	10	years
Laundry equipment		709,210		709,210	5	-	7	years
Elevators		1,885,265		1,885,265	20	-	40	years
Swimming pools		1,092,194		1,092,194	10	-	30	years
Equipment		17,574,649		17,391,731	5	-	30	years
Motor vehicles		211,660		178,847			5	years
Fences		46,872		38,482	5	-	15	years
Furniture and fixtures		8,520,979		8,235,292	5	-	7	years
Smoke alarms		505,835		505,835	5	-	7	years
Total fixed assets		400,048,762		398,554,000
Less: Accumulated depreciation		(128,631,361)		(120,190,012)
	$	271,417,401	$	278,363,988

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, a wholly-owned subsidiary of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 in cash. Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan from Insurance Strategy Funding Corp. LLC described below. The closing costs were approximately $237,000. From the purchase price, the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of the initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain financial conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

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 $1,265,000 and $1,188,000 for the six months ended June 30, 2020 and 2019, 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, 2020 and 2019, approximately $533,000 and $593,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2020 expenses referred to above, approximately $102,000 consisted of repairs and maintenance, and $126,000 of administrative expense. Approximately $305,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2020, the Hamilton Company received approximately $578,000 from the Investment Properties of which approximately $321,000 was the management fee, approximately $12,000 was for maintenance services, approximately $10,000 was for administrative services and

12

approximately $235,000 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 $1,738,000 and $1,668,000 for the six months ended June 30, 2020 and 2019, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. For the six months ended June 30, 2020, the Partnership accrued $22,000 for the employer’s match portion to the plan. For the six months ended June 30, 2019, the Partnership contributed $18,000 for the employer’s match portion to the plan.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2020 and 2019, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The Partnership has invested in seven limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are the Estate of Harold Brown, and five current and previous employees of the Management Company. The Brown Family related entities’ ownership interest was between 47.6% and 59%. See Note 14 for a description of the properties and their operations.

NOTE 4. PREPAID EXPENSES and OTHER ASSETS

Approximately $2,906,000, and $2,936,000 of security deposits are included in prepaid expenses and other assets at June 30, 2020 and December 31, 2019, respectively. The security deposits and escrow accounts are restricted cash.

Also, included in prepaid expenses and other assets at June 30, 2020 and December 31, 2019 is approximately $769,000 and $501,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisitions of Mill Street Apartments and Webster Green Apartments are included in prepaid expenses and other assets. Intanbible assets are approximately $715,000 net of accumulated amortization of approximately $845,000 and approximately $1,382,000 net of accumulated amortization of approximately $178,000 at June 30, 2020 and December 31, 2019, respectively.

Financing fees in association with the line of credit of approximately $15,000 and $36,000 are net of accumulated amortization of approximately $114,000 and $93,000 at June 30, 2020 and December 31, 2019 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2020 and December 31, 2019, 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, 2020, the interest rates on these loans ranged from 3.53% to 5.66%, payable in monthly installments aggregating approximately $1,257,000 including principal, to various dates through 2035. The majority of the mortgages are subject to prepayment penalties. At June 30, 2020, the weighted average interest rate on the above mortgages was 4.42%. The effective rate of 4.51% 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 $1,465,000 and $1,449,000 are net of accumulated amortization of approximately $1,444,000 and $1,411,000 at June 30, 2020 and December 31, 2019, respectively offset the total mortgage notes payable.

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

13

Approximate annual maturities at June 30, 2020 are as follows:

2021—current maturities	$	2,357,000
2022		2,542,000
2023		79,930,000
2024		25,419,000
2025		11,027,000
Thereafter		164,592,000
		285,867,000
Less: unamortized deferred financing costs		(1,465,000)
	$	284,402,000

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on April 1, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with the remaining portion of the proceeds added to cash reserves. In connection with this refinancing, there were closing costs of approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price, the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

On May 31, 2019, Residences at Captain Parker, LLC (“Captain Parker”), entered into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of $20,750,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 4.05% per annum, and the principal amount of the Note is due and payable on June 1, 2029. The Note is secured by a mortgage on the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane, Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2019. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker used the proceeds of the loan to pay off an outstanding loan of approximately $20,071,000. In connection with this refinancing, the property incurred a prepayment penalty of approximately $202,000. This expense was included in other expense on the consolidated statement of income.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was

14

extended until October 31, 2020. Management is currently working with the lender on a three year extension for the credit line. The costs associated with the line of credit extension were approximately $128,000.

On December 19, 2019, the Partnership drew down on the line of credit in the amount of $20,000,000, used in conjunction with the purchase of Mill Street Apartments. On December 20, 2019, the Partnership paid down $2,000,000. On January 22, 2020, the Partnership paid down $1,000,000. As of June 30, 2020, the line of credit had an outstanding balance of $17,000,000.

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 $5,000 in fees for the six months ended June 30, 2020.

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, 2020.

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, 2020, amounts received for prepaid rents of approximately $2,138,000 are included in cash and cash equivalents, and security deposits of approximately $2,906,000 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 January 2020, the Partnership approved a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2020 and payable on March 31, 2020, of $9.60 per unit ($0.32 per receipt).

In April 2020, the Partnership approved a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of June 15, 2020 and payable on June 30, 2020, of $9.60 per unit ($0.32 per receipt).

In 2019, regular quarterly distributions of $9.60 per unit ($0.32 per receipt), were paid in March, June, September and December.

15

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,
	2020		2019
Net Income per Depositary Receipt	$	0.78	$	0.89
Distributions per Depositary Receipt	$	0.64	$	0.64

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2020 are as follows:

Class A	46,775
Class B	11,109
General Partnership	585
	58,469

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). Over time, the General Partner has authorized increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2020, the Partnership has repurchased 1,428,437 Depositary Receipts at an average price of $28.43 per receipt (or $852.90 per underlying Class A Unit), 3,572 Class B Units and 188 General Partnership Units, both at an average price of $1,033.00 per Unit, totaling approximately $44,718,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 42.18 Class B Units and 2.22 General Partnership units at a cost of $74,839 and $3,939 respectively.

Given the economic uncertainty caused by the coronavirus issue, as of April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

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.

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2020, approximately 95% 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

16

August. Approximately 5% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2020 as follows:

	Commercial
	Property Leases
2021	$	2,659,000
2022		1,727,000
2023		1,316,000
2024		827,000
2025		242,000
Thereafter		581,000
	$	7,352,000

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 $251,000 and $277,000 for the six months ended June 30, 2020 and 2019 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 26% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2021	$	759,320	39,256	18	27	%
2022		605,587	24,225	8	21	%
2023		421,687	11,481	7	15	%
2024		491,548	14,668	8	17	%
2025		414,562	14,674	7	15	%
2026		—	—	—	—	%
2027		—	—	—	—	%
2028		—	—	—	—	%
2029		—	—	—	—	%
2030		142,450	3,850	1	5	%
Totals	$	2,835,154	108,154	49	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $730,000 and $240,000 at June 30, 2020 and December 31, 2019. Included in rents receivable at June 30, 2020 is approximately $96,000 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, Cypress Street, and Staples Plaza in Massachusetts.

Rents receivable at June 30, 2020 also includes approximately $172,000 representing the deferral of rental concession primarily related to the residential properties.

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2020 and 2019, cash paid for interest was approximately $6,611,000, and $5,936,000 respectively. Cash paid for state income taxes was approximately $81,000 and $76,000 during the six months ended June 30, 2020 and 2019 respectively. Additionally, during the six months ended June 30, 2020, the Partnership was involved in a non-cash financing activity of approximately $2,393,000 in connection with the refinancing of Brookside Apartments.

17

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2020 and December 31, 2019, 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, 2020 and December 31, 2019 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, 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, 2020	*	$	284,402,031	$	305,678,933
At December 31, 2019	*	$	281,771,246	$	290,892,652
Investment Properties
At June 30, 2020	*	$	166,357,134	$	179,496,478
At December 31, 2019	*	$	166,404,255	$	169,988,236

* 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, 2020 and December 31, 2019. 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, 2020 and current estimates of fair value may differ significantly from the amounts presented herein.

18

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, different depreciation methods, different tax lives, other items with limited tax deductibility and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Federal taxable income of approximately $2,039,000 was approximately $4,508,000 less than statement income for the year ended December 31, 2019. The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2019 is approximately $5,311,000 less than the statement basis. The primary reasons for the difference in tax basis are tax free exchanges, accelerated depreciation and bonus depreciation. The Partnership’s Federal tax basis in its joint venture investments is approximately $1,688,000 more than statement basis. State taxable income may be significantly different due to different tax treatments for certain items.

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

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

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, 2020, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2016 forward.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The act, among other changes,  increases the business interest expense limitation to 50% of adjusted taxable income for tax years beginning in 2020 for partnerships.   

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are the Brown Family related entities and five current and former employees of the Management Company. Harold Brown’s ownership interest was between 47.6% and 59%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, Hamilton Park Towers LLC, referred to as Dexter Park, or Hamilton Park, is a 409 unit residential complex. The purchase price was $129,500,000. The original mortgage was $89,914,000 with an interest rate of 5.57% and was to mature in 2019. The mortgage called for interest only payments for the first two years of the loan and amortized over 30 years thereafter.

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

Hamilton Park used the proceeds of the loan to pay off an outstanding loan of approximately $82,000,000 and distributed approximately $41,200,000 to its’ owners. The Partnership’s share of the distribution was approximately $16,500,000. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will

19

continue to account for the investment using the equity method of accounting, although the Partnership has no legal obligation to fund its’ share of any future operating deficiencies as needed. In connection with this refinancing, the property incurred a defeasance charge of approximately $3,830,000. Based on its’ ownership in the property, the Partnership incurred 40% of this charge, an expense of approximately $1,532,000.

At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is $125,000,000. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On 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 10 year mortgage in the original 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 with a maturity date of 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. After paying off the mortgage, the Partnership sold the individual units. 3 units were sold in 2019, resulting in a gain of approximately $429,000. In 2019, all units were sold by this Joint Venture. This investment is referred to as Hamilton Bay Apartments, 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 only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is approximately $10,000,000. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Joint Venture sold 127 of the units as condominiums and retained 49 units for long-term investment. The Joint Venture obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Joint Venture. The interest on the new loan was 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. On July 8, 2016, Hamilton 1025 LLC paid off the outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. After paying off the mortgage, the Partnership began to sell off the individual units. 2 units were sold in 2019, resulting in a gain of approximately $306,000. In 2019, all residential units were sold. The Partnership still owns the commercial building. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. 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

20

$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. At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is approximately $6,000,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. 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, 2020, the balance of the mortgage before unamortized deferred finance $16,900,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. The investment is referred to as Hamilton on Main LLC.

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, 2020, the balance of this mortgage before unamortized deferred financing costs is approximately $9,253,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of June 30, 2020

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	6,866,502		$	2,591,904		$	5,513,615		$	86,451		$	5,160,011		$	15,570,896		$	82,374,300		$	118,163,679
Cash & Cash Equivalents		368,053			85,827			243,868			20,661			162,471			553,842			3,049,217			4,483,939
Rent Receivable		343,831			43,854			6,827			—			1,407			56,713			283,270			735,902
Real Estate Tax Escrow		62,383			—			21,487			—			25,341			72,097			—			181,308
Prepaid Expenses & Other Assets		308,350			89,788			99,498			2,341			33,062			175,465			1,857,159			2,565,663
Total Assets	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,927,607		$	—		$	9,199,730		$	—		$	5,908,276		$	16,833,120		$	124,488,401		$	166,357,134
Accounts Payable & Accrued Expense		72,016			1,599			89,688			11,438			64,549			157,567			963,724			1,360,581
Advance Rental Pmts & Security Deposits		300,200			—			308,520			—			147,506			440,458			2,682,182			3,878,866
Total Liabilities		10,299,823			1,599			9,597,938			11,438			6,120,331			17,431,145			128,134,307			171,596,581
Partners’ Capital		(2,350,704)			2,809,774			(3,712,643)			98,015			(738,039)			(1,002,132)			(40,570,361)			(45,466,090)
Total Liabilities and Capital	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures				$	1,404,887					$	49,008												1,453,895
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,175,352)		$	—		$	(1,856,321)		$	—		$	(369,020)		$	(501,066)		$	(16,228,145)			(20,129,903)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(18,676,009)
Total units/condominiums
Apartments		48			—			40			175			42			148			409			862
Commercial		1			1			—			1			—			—			—			3
Total		49			1			40			176			42			148			409			865
Units to be retained		49			1			40			1			42			148			409			690
Units to be sold		—			—			—			—			—			—			—			—
Units sold through August 1, 2020		—			—			—			175			—			—			—			175
Unsold units		—			—			—			—			—			—			—			—
Unsold units with deposits for future sale as of August 1, 2020		—			—			—			—			—			—			—			—

21

Financial information for the six months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	820,088	$	65,862	$	847,492	$	41,117	$	581,210	$	1,803,314		8,230,449	$	12,389,532
Laundry and Sundry Income		6,683		—		625		—		626		17,355		45,708		70,997
		826,771		65,862		848,117		41,117		581,836		1,820,669		8,276,157		12,460,529
Expenses
Administrative		11,480		2,200		16,328		11,056		6,650		29,475		92,773		169,962
Depreciation and Amortization		243,569		10,149		169,036		1,632		173,780		524,133		1,838,920		2,961,219
Management Fees		28,052		2,203		32,296		1,645		23,004		67,729		166,246		321,175
Operating		46,299		—		28,764		96		50,654		177,595		529,844		833,252
Renting		3,404		—		9,682		—		5,750		15,493		30,883		65,212
Repairs and Maintenance		67,209		3,046		43,375		—		38,950		233,991		511,248		897,819
Taxes and Insurance		129,401		30,457		79,714		8,680		72,176		232,474		1,138,952		1,691,854
		529,414		48,055		379,195		23,109		370,964		1,280,890		4,308,866		6,940,493
Income Before Other Income		297,357		17,807		468,922		18,008		210,872		539,779		3,967,291		5,520,036
Other Income (Loss)
Interest Expense		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
Net Income (Loss)	$	125,266	$	17,807	$	282,514	$	18,008	$	92,370	$	156,992	$	1,430,505	$	2,123,462
Net Income (Loss)—NERA 50%	$	62,632	$	8,903	$	141,257	$	9,004	$	46,185	$	78,495				346,476
Net Income —NERA 40%													$	572,202		572,202
															$	918,678

22

Financial information for the three months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	380,708	$	5,391	$	419,342	$	20,558	$	290,517	$	897,613	$	4,023,946	$	6,038,075
Laundry and Sundry Income		3,298		—		171		—		626		8,606		19,966		32,667
		384,006		5,391		419,513		20,558		291,143		906,219		4,043,912		6,070,742
Expenses
Administrative		5,293		1,550		8,572		931		4,168		13,627		45,721		79,862
Depreciation and Amortization		121,927		5,075		84,541		816		86,954		263,086		921,932		1,484,331
Management Fees		10,316		—		15,829		822		11,472		32,745		79,163		150,347
Operating		20,776		—		15,776		51		28,428		83,750		219,463		368,244
Renting		629		—		929		—		2,750		7,773		14,080		26,161
Repairs and Maintenance		40,200		3,046		21,797		—		28,056		99,155		224,236		416,490
Taxes and Insurance		64,724		15,238		39,808		4,492		36,125		109,712		562,731		832,830
		263,865		24,909		187,252		7,112		197,953		609,848		2,067,326		3,358,265
Income Before Other Income		120,141		(19,518)		232,261		13,446		93,190		296,371		1,976,586		2,712,477
Other Income (Loss)
Interest Expense		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Interest Income		—		—		—		—		—		—		—		—
Gain on sale of real estate		—		—		—				—		—		—		—
		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Net Income (Loss)	$	48,783	$	(19,518)	$	139,278	$	13,446	$	33,948	$	105,967	$	707,904	$	1,029,808
Net Income (Loss)—NERA 50%	$	24,392	$	(9,758)	$	69,639	$	6,723	$	16,974	$	52,984				160,953
Net Income (Loss)—NERA 40%													$	283,162		283,162
															$	444,115

Future annual mortgage maturities at June 30, 2020 are as follows:

	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
6/30/2021	$	—	$	209,541	$		$	—	$		$	209,541
6/30/2022		—		217,796				—				217,796
6/30/2023		—		226,376		—		—				226,376
6/30/2024		—		235,293		—		—				235,293
6/30/2025		—		244,563		—		16,900,000				17,144,563
Thereafter		10,000,000		8,119,429		6,000,000		—		125,000,000		149,119,429
		10,000,000		9,252,998		6,000,000		16,900,000		125,000,000		167,152,998
Less: unamortized deferred financing costs		(72,393)		(53,268)		(91,724)		(66,880)		(511,599)		(795,864)
	$	9,927,607	$	9,199,730	$	5,908,276	$	16,833,120	$	124,488,401	$	166,357,134

At June 30, 2020 the weighted average interest rate on the above mortgages was 3.91%. The effective rate was 3.98% including the amortization expense of deferred financing costs.

23

Summary financial information at June 30, 2019

				Hamilton												Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,009,806		$	2,594,393		$	5,833,501		$	89,352		$			$	5,479,383		$	16,288,449		$	85,469,775		$	122,764,659
Cash & Cash Equivalents		371,049			141,625			223,371			271,833			19,616			132,837			166,951			2,443,433			3,770,715
Rent Receivable		246,158			21,570			4,240			—			—			480			22,923			99,756			395,127
Real Estate Tax Escrow		74,605			—			20,314			—			—			27,807			96,530			—			219,256
Prepaid Expenses & Other Assets		286,887			107,376			60,279			1,199			5,189			14,264			213,740			1,216,087			1,905,021
Total Assets	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,913,818		$	—		$	9,394,671		$	—		$	—		$	5,900,093		$	16,817,068		$	124,423,778		$	166,449,428
Accounts Payable & Accrued Expense		121,192			2,811			82,534			18,162			4,048			56,897			232,031			799,246			1,316,921
Advance Rental Pmts& Security Deposits		311,817			—			322,013			6,305			101			129,339			441,388			3,224,176			4,435,139
Total Liabilities		10,346,827			2,811			9,799,218			24,467			4,149			6,086,329			17,490,487			128,447,200			172,201,488
Partners’ Capital		(2,358,322)			2,862,153			(3,657,513)			337,917			20,656			(431,558)			(701,894)			(39,218,149)			(43,146,710)
Total Liabilities and Capital	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,431,077		$	—		$	168,959		$	10,327		$	—		$	—		$	—			1,610,362
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,179,161)		$	—		$	(1,828,757)		$	—		$	—		$	(215,779)		$	(350,947)		$	(15,687,260)			(19,261,903)
Total Investment in Unconsolidated Joint Ventures (Net)																									$	(17,651,541)
Total units/condominiums
Apartments		48			—			40			175			48			42			148			409			910
Commercial		1			1			—			1			—			—			—			—			3
Total		49			1			40			176			48			42			148			409			913
Units to be retained		49			1			40			1			—			42			148			409			690
Units to be sold		—			—			—			175			48			—			—			—			223
Units sold through August 1, 2019		—			—			—			171			44			—			—			—			215
Unsold units		—			—			—			4			4			—			—			—			8
Unsold units with deposits for future sale as of August 1, 2019		—			—			—			1			2			—			—			—			3

24

Financial information for the six months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	910,111	$	101,241	$	803,093	$	47,061	$	3,629	$	556,069	$	1,688,003	$	8,060,966	$	12,170,173
Laundry and Sundry Income		6,870		—		584		—		—		2,135		20,080		48,720		78,389
		916,981		101,241		803,677		47,061		3,629		558,204		1,708,083		8,109,686		12,248,562
Expenses
Administrative		15,255		9,674		10,043		4,402		4,214		5,750		34,912		95,917		180,167
Depreciation and Amortization		239,432		10,149		172,453		6,391		5,420		177,501		519,106		1,807,214		2,937,666
Management Fees		34,227		4,320		30,443		1,899		145		22,299		65,003		168,653		326,989
Operating		37,045		8		40,524		862		—		51,579		191,817		599,340		921,175
Renting		8,517		—		11,993		—		—		2,574		33,490		54,549		111,123
Repairs and Maintenance		64,670		3,180		42,277		28,399		10,266		82,321		317,086		563,942		1,112,141
Taxes and Insurance		123,306		30,860		75,609		14,445		5,206		64,769		207,339		1,035,769		1,557,303
		522,452		58,191		383,342		56,398		25,251		406,793		1,368,753		4,325,384		7,146,564
Income Before Other Income		394,529		43,050		420,335		(9,337)		(21,622)		151,411		339,330		3,784,302		5,101,998
Other Income (Loss)
Interest Expense		(243,020)		—		(189,082)		—		(6)		(116,605)		(380,539)		(2,537,735)		(3,466,987)
Gain on Sale of Real Estate		—		—		—		306,075		432,908		—		—		—		738,983
		(243,020)		—		(189,082)		306,075		432,902		(116,605)		(380,539)		(2,537,735)		(2,728,004)
Net Income (Loss)	$	151,509	$	43,050	$	231,253	$	296,738	$	411,280	$	34,806	$	(41,209)	$	1,246,567	$	2,373,994
Net Income (Loss)—NERA 50%	$	75,755	$	21,525	$	115,627	$	148,369	$	205,641	$	17,403	$	(20,605)				563,715
Net Income (Loss)—NERA 40%															$	498,630		498,630
																	$	1,062,345

Financial information for the three months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	450,538	$	25,951	$	417,850	$	23,466	$	—	$	281,232	$	865,335	$	4,032,707	$	6,097,079
Laundry and Sundry Income		3,865		—		(805)		—		—		228		10,018		24,695		38,001
		454,403		25,951		417,045		23,466		—		281,460		875,353		4,057,402		6,135,080
Expenses
Administrative		9,876		7,582		4,653		2,708		841		2,034		17,065		40,385		85,144
Depreciation and Amortization		119,887		5,075		86,226		3,195		—		88,906		260,668		907,113		1,471,070
Management Fees		17,021		2,160		16,387		934		—		11,232		33,135		82,504		163,373
Operating		15,594		—		17,921		88		37		27,824		84,527		217,696		363,687
Renting		5,187		—		8,473		—		—		542		17,378		34,886		66,466
Repairs and Maintenance		26,786		3,180		23,810		20,359		—		45,649		192,894		307,357		620,035
Taxes and Insurance		61,476		15,183		35,369		7,096		300		32,518		102,907		517,043		771,892
		255,827		33,180		192,839		34,380		1,178		208,705		708,574		2,106,984		3,541,667
Income Before Other Income		198,576		(7,229)		224,206		(10,914)		(1,178)		72,755		166,779		1,950,418		2,593,413
Other Income (Loss)
Interest Expense		(122,015)		—		(94,834)		—		—		(58,613)		(192,271)		(1,267,633)		(1,735,366)
Interest Income		—		—		—		305,320		—		—		—		—		305,320
		(122,015)		—		(94,834)		305,320		—		(58,613)		(192,271)		(1,267,633)		(1,430,046)
Net Income (Loss)	$	76,561	$	(7,229)	$	129,372	$	294,406	$	(1,178)	$	14,142	$	(25,492)	$	682,784	$	1,163,367
Net Income (Loss)—NERA 50%	$	38,281	$	(3,614)	$	64,686	$	147,203	$	(589)	$	7,071	$	(12,746)				240,292
Net Income (Loss)—NERA 40%															$	273,114		273,114
																	$	513,406

25

NOTE 15. EMPLOYEE BENEFIT 401(k) PLANS

Effective January 1, 2019, employees of the Partnership, who meet certain minimum age and service requirements, are eligible to participate in the Management Company’s 401(k) Plan (the “401(k) Plan”).  Eligible employees may elect to defer up to 90 percent of their eligible compensation on a pre-tax basis to the 401(k) Plan, subject to certain limitations imposed by federal law. 

The amounts contributed by employees are immediately vested and non-forfeitable.  Beginning January 1, 2019, the Partnership matched 50% up to 6% of compensation deferred by each employee in the 401(k) plan. The Partnership may make discretionary matching or profit-sharing contributions to the 401(k) Plan on behalf of eligible participants in any plan year.  Participants are always 100 percent vested in their pre-tax contributions and will begin vesting in any matching or profit-sharing contributions made on their behalf after two years of service with the Partnership at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Partnership. Total expense recognized by the Partnership for the 401(k) Plan for the six months ended June 30, 2020 was $22,000.

NOTE 16. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In April 2020, the FASB issued a Staff Question & Answer (“Q&A”) which was intended to reduce the challenges of evaluating the enforceable rights and obligations of leases for concessions granted to lessees in response to the novel coronavirus disease (“COVID-19”), which was characterized on March 11, 2020 by the World Health Organization as a pandemic. Prior to this guidance, the Partnership was required to determine, on a lease by lease basis, if a lease concession should be accounted for as a lease modification, potentially resulting in any lease concessions granted being recorded as a reduction to revenue on a straight-line basis over the remaining terms of the leases. The Q&A allows both lessors and lessees to bypass this analysis and elect not to evaluate whether concessions provided in response to the COVID-19 pandemic are lease modifications. This relief is subject to certain conditions being met, including ensuring the total remaining lease payments are substantially the same or less as compared to the original lease payments prior to the concession being granted. The Partnership has elected to apply such relief and will therefore not evaluate if lease concessions that were granted in response to the COVID-19 pandemic meet the definition of a lease modification.  Accordingly, the Partnership accounted for qualifying rent concessions as negative variable lease payments, which reduced revenue from such leases in the period the concessions were granted.

NOTE 17—SUBSEQUENT EVENTS

From July 1, 2020 through August 6, 2020, the Partnership purchased no Depository Receipts.

The current outbreak of the COVID-19 virus, which was characterized on March 11, 2020 by the World Health Organization as a pandemic, has currently resulted in a worldwide health crisis, which is adversely affecting international, national and local economies and financial markets generally, and continues to have an unprecedented effect on the rental housing and commercial property markets. Given the continuous evolution of the COVID-019 pandemic and the global response to curb its spread, the Partnership is not able to estimate the resulting effects on its results of operations, cash flows, financial condition, or liquidity for the year ending December 31, 2020 or beyond.

The Government’s measures put into place to combat the spread of the virus have caused significant disruptions to life and business operations in Massachusetts, the country and the world. The length and severity of the current recession and the effects on the Partnership’s business are unknown at this time.

During the current state of emergency, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants. Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe. Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services. Leasing is limited to unoccupied units and a web based video technology is being used to remotely show apartments. Hamilton and the Partnership will continue to adjust their business practices to comply with Federal and State mandates for workplace and rental property operations.

26

Massachusetts has passed an emergency law to stop evictions during the Covid-19 state of emergency.The moratorium has been extended through October17, 2020.Past due rents receivable have increased and the Partnership is currently experiencing significantly higher vacancies for the upcoming rental season.

27

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 2020 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 current outbreak of the COVID- 19, a novel strain of coronavirus, has resulted in the World Health Organization declaring a global pandemic on March 11, 2020. On March 10, the governor of Massachusetts, Charlie Baker, declared a state of emergency and ordered all non-essential businesses closed and prohibited the gathering of 10 or more people. The Governor’s order has since been subsequently modified, but is currently in place for the foreseeable future. Additionally, March saw the closure of local colleges and universities for the balance of the academic year. On-campus summer programs were cancelled and discussions are underway as to how and if colleges and universities are to re-open in September.

The government’s measures put into place to combat the spread of the virus have caused significant disruptions to life and business operations in Massachusetts, the country and the world. The length and severity of the current recession and the effects on the Partnership’s business are unknown at this time.

Rental collections for the second quarter for the Partnership’s wholly owned properties were approximately 90% of rents due. Residential tenants paid approximately 92% of their rent and commercial tenants paid approximately 62% of theirs. Historically, commercial rents represent 5% of the Partnership’s revenue. The rent collections for the Joint Ventures were approximately 91%. The second quarters’ collections are not necessarily an indicator of future cash receipts. As of June 30, 2020, Gross rents receivable increased approximately $908,000 over the March 31, 2020 balances.

Massachusetts has passed an emergency law to stop evictions during the Covid-19 state of emergency. The moratorium on evictions has been extended through October 17, 2020.

Vacancy rates for the Partnership’s residential properties as of August 1, 2020 were 6.3% as compared with a vacancy rate of 3.2% as of August 1, 2019. With the uncertainties with the economy and the re-opening of Colleges and Universities in the fall, this year’s rental season started off slowly and has just recently started to improve. However, the inventory of unrented units is significantly higher than in past years. If these units are not rented prior to the end of September, it is likely that the Partnership will have a high number of vacancies for the balance of 2020.

Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the year. Given the current economic environment, it is not possible to estimate the amount of lease turnover we will experience or the amount of increases to or decreases from the current rental rates we

28

will realize with lease renewals or new leases. However,we are currently offering reduced rental rates and significant rent concessions at certain properties.

The Partnership currently leases approximately 15% of its apartment units and 57% of the Joint Venture apartment units to Students. If colleges and universities do not open in September, there is likely to be a significant effect on the occupancy rates and rental income of the Partnership.

During the current state of emergency, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants. Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe. Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services. Leasing is limited to unoccupied units unless permission is granted by the current tenant and a web based video technology is being used to remotely show apartments. Hamilton and the Partnership will continue to adjust their s business practices to comply with Federal and State mandates for workplace and rental property operations.

During the second quarter of 2020, rents increased on average of 3.6% for renewals and decreased on average of 0.1% for new leases. For the balance of 2020, due to the ongoing global coronavirus pandemic, management expects a significant softening of the local real estate market and is experiencing a decrease in rent and more rent concessions.

For the second quarter of 2020, including the purchase of Mill Street, consolidated revenue increased by 5.1%, operating expenses increased by 8.7% and Income before Other Income (Expense) decreased by 2.9%. Excluding the Mill Street acquisition, same store revenue decreased by 1.4%, operating expenses decreased by 4.3% and Income before Other Income (Expense) grew by 5.0%. For the same reporting period, vacancy was 6.2% vs 3.2%. Excluding Depreciation and Amortization, same store revenues (excluding Mill Street) decreased by 1.5%, operating expenses decreased by 5.8% and Net Operating Income increased by 2.3%.

The Joint Ventures of 1025 Hancock and Hamilton Bay in 2019 sold out all remaining residential condominium units. 1025 Hancock sold 2 remaining units for a gain of approximately $306,000, and Hamilton Bay sold its 3 remaining units at a gain of approximately $429,000. The estimated profit to the Partnership for the sale of these units from 2014 through 2019 is approximately $7,168,000.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus an applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was subsequently extended until October 31, 2020. Management is currently working with the lender on a three year extension for the credit line. The costs associated with the line of credit extension were approximately $128,000. As of June 30, 2020, the credit line had an outstanding balance of $17,000,000.

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on March 31, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with the remaining portion of the proceeds were added to cash reserves. In connection with this refinancing, there were closing costs of approximately $132,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price,

29

the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.50% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

In May, 2019, the Partnership refinanced the Residences at Captain Parker. The prior mortgage of $20,071,000 had, at that time, a variable interest rate of 4.5%, which matured in February 2026, and had interest only payments until March 2021, with a thirty year amortization schedule thereafter. The new mortgage is for $20,750,000, with a fixed rate of 4.05%, maturing in 10 years, with interest only payments for the term of the loan. In connection with the refinancing, the partnership incurred a prepayment penalty of approximately $202,000.

From the start of the Stock Repurchase Program in 2007 through June 30, 2020, the Partnership has purchased 1,428,437 Depositary Receipts. During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 0.6 Class B Units and 0.03 General Partnership units at a cost of $775 and $41 respectively. In January 2019, the Partnership purchased 40,000 Depository Receipts from the former president of the management company. In March of 2020, the Board of Advisors and Board of Directors unanimously approved an extension of the Repurchase Program until March 31, 2025. Given the economic uncertainty caused by the coronavirus issue, as of April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

At August 1, 2020, the Estate of Harold Brown and his brother Ronald Brown collectively own approximately 30.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). The Estate of 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 Jameson Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by the Estate of Harold Brown, are owned by HBC Holdings LLC, an entity of which Jameson Brown 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, 2020, tenant renewals were approximately 74% with an average rental increase of approximately 3.7%, new leases accounted for approximately 26% with rental rate increases of approximately 0.1 %. During the three months ended June 30, 2020, leasing commissions were approximately $159,000 compared to approximately $217,000 for the six months ended June 30, 2019, a decrease of approximately $58,000 (26.7%) . Tenant concessions were approximately $18,000 for the six months ended June 30, 2020, compared to approximately $33,000 for the six months ended June 30, 2019, a decrease of approximately $15,000 (45.5%). Tenant improvements were approximately $897,000 for the six months ended June 30, 2020, compared to approximately $1,283,000 for the six months ended June 30, 2019, a decrease of approximately $386,000 (30.1%).

Hamilton accounted for approximately 2.5% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2020 and 5.0 % during the six months ended June 30, 2019. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance

30

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 $64,000 (65.9%) and approximately $100,000 (80.5%) of the legal services paid for by the Partnership during the six months ended June 30, 2020 and 2019 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, 2020, Hamilton provided the Partnership approximately $305,000 in construction and architectural services, compared to approximately $189,000 for the six months ended June 30, 2019.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the six months ended June 30, 2020 and 2019, Hamilton charged the Partnership $62,500 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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

31

revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).

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

We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

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

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

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

32

replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

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

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

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

Investments in Joint Ventures: The Partnership accounts for its 40%-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Joint Ventures, and subsequently adjusted for the Partnership’s share in earnings, cash contributions and distributions. Under the equity method of accounting, our net equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits.

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

With respect to investments in and advances to the Investment Properties, the Partnership looks to the underlying properties to assess performance and the recoverability of carrying amounts for those investments in a manner similar to direct investments in real estate properties. An impairment charge is recorded if management’s

33

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.

34

RESULTS OF OPERATIONS

Three Months Ended June 30, 2020 and June 30, 2019

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,444,000 during the three months ended June 30, 2020, compared to approximately $4,579,000 for the three months ended June 30, 2019, a decrease of approximately $135,000 (2.9%).

The rental activity is summarized as follows:

	Occupancy Date
	August 1, 2020		August 1, 2019
Residential
Units	2,911		2,730
Vacancies	182		87
Vacancy rate	6.3	%	3.2	%
Commercial
Total square feet	108,043		108,043
Vacancy	4,232		938
Vacancy rate	3.9	%	0.9	%

	Rental Income (in thousands)
	Three Months Ended June 30,
	2020						2019
	Total			Continuing			Total			Continuing
	Operations			Operations			Operations			Operations
Total rents	$	15,647		$	15,647		$	14,886		$	14,886
Residential percentage		95	%		95	%		94	%		94	%
Commercial percentage		5	%		5	%		6	%		6	%
Contingent rentals	$	251		$	251		$	277		$	277

35

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019:

	Three Months Ended June 30,				Dollar		Percent
	2020		2019		Change		Change
Revenues
Rental income	$	15,646,814	$	14,886,423	$	760,391	5.1%
Laundry and sundry income		112,292		104,980		7,312	7.0%
		15,759,106		14,991,403		767,703	5.1%
Expenses
Administrative		512,195		626,180		(113,985)	(18.2%)
Depreciation and amortization		4,601,617		3,590,240		1,011,377	28.2%
Management fee		615,541		597,197		18,344	3.1%
Operating		1,291,781		1,125,813		165,968	14.7%
Renting		128,608		242,515		(113,907)	(47.0%)
Repairs and maintenance		2,049,174		2,287,313		(238,139)	(10.4%)
Taxes and insurance		2,115,721		1,942,998		172,723	8.9%
		11,314,637		10,412,256		902,381	8.7%
Income Before Other Income (Expense)		4,444,469		4,579,147		(134,678)	(2.9%)
Other Income (Expense)
Interest income		52		90		(38)	(42.2%)
Interest expense		(3,423,583)		(3,133,439)		(290,144)	9.3%
Income (Loss) from investments in unconsolidated joint ventures		444,113		513,406		(69,293)	(13.5%)
Other expense		—		(194,960)		194,960	—
		(2,979,418)		(2,814,903)		(164,515)	5.8%
Net Income	$	1,465,051	$	1,764,244	$	(299,193)	(17.0%)

Rental income for the three months ended June 30, 2020 was approximately $15,646,000, compared to approximately $14,886,000 for the three months ended June 30, 2019, an increase of approximately $760,000 (5.1%). The factors that can be attributed to this increase are as follows: the acquisition of Mill Street resulted in an increase in rental income of approximately $976,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include Redwood Hills, Hamilton Oaks, Westside Colonial, Brookside Associates, Olde English Village, and 1144 Commonwealth, with increases of approximately $46,000, $42,000, $28,000, $23,000, $23,000, and $21,000, 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, 2020 were approximately $11,314,000 compared to approximately $10,412,000 for the three months ended June 30, 2019, an increase of approximately $902,000 (8.7%). Excluding the increase in expenses at Mill Street of approximately $1,346,000, Operating expenses decreased approximately $444,000 (4.3%).The factors contributing to the decrease are a decrease in repairs and maintenance expenses of approximately $300,000 (13.1%), a decrease in administrative expenses of approximately $ 131,000, (20.9%), and a decrease in renting expenses of approximately $122,000, (50.3%), partially offset by an increase in operating costs of approximately $90,000 (8.0%),

Interest expense for the three months ended June 30, 2020 was approximately $3,423,000 compared to approximately $3,133,000 for the three months ended June 30, 2019, an increase of approximately $290,000 (9.3%). Excluding the increase in interest expense attributable to Mill Street of approximately $281,000, there was an increase in interest expense of approximately $8,000.

At June 30, 2020, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

36

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $444,000 for the three months ended June 30, 2020, compared to net income of approximately $513,000 for the three months ended June 30, 2019, a decrease in income of approximately $69,000 (13.5%). This decrease is primarily due to the reduction in the gain realized from the sales of condominium units of approximately $305,000 with the Partnership’s share amounting to 50%, on the sale of 2 units at Hamilton 1025 Apartments LLC for the quarter ended June 30, 2019, compared to no units sold in the quarter ended June 30, 2020. Included in the income for the three months ended June 30, 2020 is depreciation and amortization expense of approximately $650,000. The proportional income for the three months ended June 30, 2020 from the investment in Dexter Park is approximately $283,000.

As a result of the changes discussed above, net income for the three months ended June 30, 2020 was approximately $1,465,000 compared to income of approximately $1,764,000 for the three months ended June 30, 2019, a decrease in income of approximately $299,000 (17.0 %).

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $8,789,000 during the six months ended June 30, 2020, compared to approximately $8,531,000 for the six months ended June 30, 2019, an increase of approximately $258,000 (3.0%).

	Six Months Ended June 30,				Dollar		Percent
	2020		2019		Change		Change
Revenues
Rental income	$	31,900,244	$	29,654,899	$	2,245,345	7.6%
Laundry and sundry income		234,446		218,649		15,797	7.2%
		32,134,690		29,873,548		2,261,142	7.6%
Expenses
Administrative		1,096,853		1,238,938		(142,085)	(11.5%)
Depreciation and amortization		9,167,084		7,272,918		1,894,166	26.0%
Management fee		1,264,534		1,187,806		76,728	6.5%
Operating		2,960,183		3,009,831		(49,648)	(1.6%)
Renting		325,479		424,573		(99,094)	(23.3%)
Repairs and maintenance		4,135,392		4,231,544		(96,152)	(2.3%)
Taxes and insurance		4,396,262		3,977,104		419,158	10.5%
		23,345,787		21,342,714		2,003,073	9.4%
Income Before Other Income ( Expense)		8,788,903		8,530,834		258,069	3.0%
Other Income (Expense)
Interest income		159		269		(110)	(40.9%)
Interest (expense)		(6,873,908)		(6,133,728)		(740,180)	12.1%
Income from investments in unconsolidated joint ventures		918,680		1,062,345		(143,665)	(13.5%)
Other expense		—		(194,960)		194,960	—
		(5,955,069)		(5,266,074)		(688,995)	13.1%
Net Income	$	2,833,834	$	3,264,760	$	(430,926)	(13.2%)

Rental income for the six months ended June 30, 2020 was approximately $31,900,000, compared to approximately $29,655,000 for the six months ended June 30, 2019, an increase of approximately $2,245,000 (7.6%). The factors that can be attributed to this increase are as follows: the acquisition of Mill Street resulted in an increase in rental income of approximately $1,949,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, Hamilton Oaks, 62 Boylston, Westside Colonial, Redwood Hills, 1144 Commonwealth Avenue, and Woodland Park, with increases of approximately $104,000, $89,000, $80,000, $77,000, $70,000, and $49,000 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.

37

Operating expenses for the six months ended June 30, 2020 were approximately $23,345,000 compared to approximately $21,342,000 for the six months ended June 30, 2019, an increase of approximately $2,003,000 (9.4%). Excluding the increase in operating expenses attributable to the acquisition of Mill Street of approximately $2,692,000, operating expenses decreased approximately $689,000 (3.2%). The factors contributing to this net decrease are a decrease in depreciation and amortization of approximately $ 219,000 (3.0%) due to fully depreciated assets, a decrease in repairs and maintenance expenses of approximately $218,000 (5.1%), a decrease in operating costs of approximately $215,000 (7.2%), partially offset by an increase in taxes and insurance of approximately $246,000 (6.2%).

Interest expense for the six months ended June 30, 2020 was approximately $6,874,000 compared to approximately $6,134,000 for the six months ended June 30, 2019, an increase of approximately $740,000 (12.1%). Excluding the increase in interest expense attributable to Mill Street of approximately $563,000, there was an increase in interest expense of approximately $177,000, primarily due to an increase in interest expense on the line of credit of approximately $399,000, partially offset by a decrease in interest expense for Captain Parker of approximately $144,000.

At June 30, 2020, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 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 $919,000 for the six months ended June 30, 2020, compared to net income of approximately $1,062,000 for the six months ended June 30, 2019, a decrease in income of approximately $144,000 (13.5%). This decrease is primarily due to the reduction in the gain realized from the sales of condominium units of approximately $739,000 with the Partnership’s share amounting to 50%, on the sale of 3 units at Hamilton Bay Apartments LLC, and the sale of 2 units at Hamilton 1025 Apartments LLC for the six months ended June 30, 2019, compared to no units sold in the quarter ended June 30, 2020. Included in the income for the six months ended June 30, 2020 is depreciation and amortization expense of approximately $1,297,000. The proportional income for the six months ended June 30, 2020 from the investment in Dexter Park is approximately $572,000.

As a result of the changes discussed above, net income for the six months ended June 30, 2020 was approximately $2,834,000 compared to income of approximately $3,265,000 for the six months ended June 30, 2019, an increase in net income of approximately $431,000 (13.2 %).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six months of 2020 was the collection of rents and the proceeds from the refinancing of Brookside Apartments. The Partnership’s principal source of cash in 2019 was the collection of rents. The majority of cash and cash equivalents of $15,396,023 at June 30, 2020 and $7,546,324 at December 31, 2019 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $7,849,699 for the six months ended June 30, 2020 is summarized as follows:

	Six Months Ended June 30,
	2020		2019
Cash provided by operating activities	$	9,524,873	$	11,911,247
Cash (used in) investing activities		(454,059)		(137,987)
Cash provided by (used in) financing activities		1,510,950		(2,584,183)
Repurchase of Depositary Receipts, Class B and General Partner Units		(394,031)		(3,305,651)
Distributions paid		(2,338,034)		(2,352,443)
Net increase in cash and cash equivalents	$	7,849,699	$	3,530,983

The change in cash provided by operating activities is due to various factors, including a change in depreciation expense due to recent acquisitions, a change in income and distribution from joint ventures, and other factors. The decrease in cash provided by investing activities is primarily due to improvements to rental properties. The change in

38

cash used in financing activities is primarily due to the refinancing of the mortgage at Brookside Apartments, partially offset by paydown of mortgages, and the pay down of the line of credit originally used for the purchase of Mill Street.

During 2020, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $1,504,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at 62 Boylston Street, Captain Parker, Hamilton Oaks, Redwood Hills, Hamilton Green, and Hamilton Highland at a cost of approximately $341,000, $279,000, $224,000, $106,000, $99,000 and $66,000 respectively.

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on March 31, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with the remaining portion of the proceeds added to cash reserves. In connection with this refinancing, there were closing costs of approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price, the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street Gardens entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan (the “Loan”) in the maximum principal amount of $35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

On May 31, 2019, Residences at Captain Parker, LLC (“Captain Parker”), entered into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of $20,750,000. Interest only payments on the Note is payable on a monthly basis at a fixed interest rate of 4.05% per annum, and the principal amount of the Note is due and payable on June 1, 2029. The Note is secured by a mortgage on the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane, Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2019. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker used the proceeds of the loan to pay off an outstanding loan of approximately $20,071,000. In connection with this refinancing, the property incurred a prepayment penalty of approximately $202,000.

During the six months ended June 30, 2020 the Partnership received distributions of approximately $1,066,000 from the investment properties. For the six months ended, June 30, 2019, the Partnership received distributions of approximately $2,348,000 from the investment properties. Included in these net distributions is the amount from Dexter Park of approximately $700,000 and $1,168,000 for the six months ended June 30, 2020 and 2019, respectively. In January 2020, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2020. In April 2020, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on June 30, 2020.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b)

39

the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was extended until October 31, 2020. The costs associated with the line of credit extension were approximately $128,000.

On December 19, 2019, the Partnership drew down on the line of credit in the amount of $20,000,000, used in conjunction with the purchase of Mill Street Apartments. On December 20, 2019, the Partnership paid down $2,000,000. On January 22, 2020, the Partnership paid down the line by $1,000,000. As of June 30, 2020, the line of credit had an outstanding balance of $17,000,000.

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, 2020 the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At June 30, 2020, our proportionate share of the non-recourse debt related to these investments was approximately $71,076,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

As of June 30, 2020, we are subject to contractual payment obligations as described in the table below.

				Payments due by period
	2021		2022		2023		2024		2025		Thereafter		Total
Contractual Obligations
Long -term debt
Mortgage debt *	$	2,357,013	$	2,541,650	$	79,930,355	$	25,419,180	$	11,027,464	$	164,591,469	$	285,867,131
Other obligations		17,000,000		—		—		—		—		—		17,000,000
Total Contractual Obligations	$	19,357,013	$	2,541,650	$	79,930,355	$	25,419,180	$	11,027,464	$	164,591,469	$	302,867,131

Excluding unamortized deferred financing costs

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

See Notes 5 and 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.

40

● 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.

41

● 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, 2020, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $453,020,000 in long-term debt, substantially all of which require payment of interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. This long term debt matures through 2035. The Partnership, its Subsidiary Partnerships and the Investment Properties collectively have variable rate debt of $27,000,000 (without taking out unamortized deferred financing costs) as of June 30, 2020. Interest rates ranged from LIBOR plus 195 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 $220,000 annually and the increase or decrease in the fair value of the Partnership’s fixed rate debt as of June 30, 2020 would be approximately $20 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 2020 that materially affected or are reasonably likely to materially affect our internal control over financial reporting. We have not experienced any material impacts to our internal control over financial reporting as a result of a majority or our office employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing our internal control environment to ensure that our controls continue to be designed effectively and continue to operate effectively throughout the duration of the pandemic.

42

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been a material changes to the risk factors disclosed in Part 1, Item 1A, of our annual report on Form 10K for the fiscal year ended December 31, 2019. The additional risk factor is as follows:

The COVID-19 pandemic has caused severe disruptions in the United States and global economies and we expect it will continue to adversely affect our financial condition, results of operations, cash flows, liquidity and performance and that of our tenants.

Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

The global impact of the COVID-19 pandemic is continually evolving and public health officials and governmental authorities, including those in Massachusetts and New Hampshire, the markets in which we operate, have reacted by taking measures such as prohibiting people from congregating in heavily populated areas, instituting quarantines, restricting travel, issuing “stay-at-home” orders, restricting the types of businesses that may continue to operate (including the types of construction projects that may proceed) and closing schools, among many others. Most of these restrictions began in earnest in March 2020 and they quickly had a material adverse impact on economic and market conditions around the world, including the United States and the markets in which our properties are located, and on us. It is possible that public health officials and governmental authorities in the markets in which we operate may impose additional restrictions in an effort to slow the spread of COVID-19 or may relax or revoke existing restrictions too quickly, which could, in either case, exacerbate the severity of these adverse impacts on the economy. There is great uncertainty regarding the duration and breadth of the COVID-19 pandemic, as well as possible future responses, which makes it impossible for us to predict with certainty the impact that COVID-19 will have on us and our tenants at this time. Factors related to COVID-19 that have had, or could have, a material adverse effect on our results of operations and financial condition, include:

● a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action, which could adversely affect our operations and those of our tenants;

● reduced economic activity impacting the businesses, financial condition and liquidity of our tenants has caused, and is expected to continue to cause, one or more of our tenants to be unable to meet their obligations to us, including their ability to make rental payments, in full or at all, or to otherwise seek modifications of such obligations, including rent concessions, deferrals or abatements, or to declare bankruptcy;

● the impact of new or continued complete or partial shutdowns of the operations of one or more of our commercial tenants’ businesses, including retail tenants, and parking operators, temporary or long-term disruptions in our commercial tenants’ supply chains from local, national and international suppliers or delays in the delivery of products, services or other materials necessary for our commercial tenants’ operations, could force these tenants to reduce, delay or eliminate offerings of their products and services, which could result in less revenue, income and cash flow, and possibly their bankruptcy or insolvency, which in turn could:

o reduce our cash flows,

o adversely impact our ability to finance, refinance or sell a property,

43

o adversely impact our ability to continue paying dividends to our stockholders at current levels, or at all, and

o result in additional legal and other costs to enforce our rights, collect rent and/or re-lease the space occupied by the distressed tenant;

● the duration and scope of the mandatory business closures and “stay-at-home” orders have had, and are expected to continue to have, a severe negative impact on our commercial retail tenants that depend on in-person interactions with their customers to generate revenues and have resulted, and are expected to continue to result, in most retail tenants being unable to make timely rental payments in full or at all;

● the extent to which COVID-19 decreases customers’ willingness to frequent, or prevents customers from frequenting, our tenants’ businesses in the future, may result in our retail tenants’ continued inability to make timely rental payments to us under their leases;

● some of our residential and commercial tenants have approached us seeking either rent concessions, deferrals or abatements, and the extent to which we grant these requests or instead seek to enforce our legal remedies could have a material adverse effect on our results of operations, liquidity and cash flows;

● the degree to which our commercial tenants’ businesses have been and continue to be negatively impacted may require us to write-off a tenant’s accrued rent balance and this could have a material adverse effect on our results of operations and liquidity;

● if new or existing actions or measures implemented to prevent the spread of COVID-19 continue to result in increasing unemployment, it may negatively affect the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay rent, in full or at all, in a timely manner;

● the impact of COVID-19 could result in an event or change in circumstances that results in an impairment in the value of our properties or our investments in unconsolidated joint ventures, and any such impairment could have a material adverse effect on our results of operations in the periods in which the charge is taken;

o we may be unable to restructure or amend leases with certain of our tenants on terms favorable to us or at all;

● the impact and validity of interpretations of lease provisions and related claims by tenants regarding their obligations to pay rent as a result of COVID-19, and any court rulings or decisions interpreting these provisions, could have a material adverse effect on our results of operations and liquidity;

● restrictions intended to prevent the spread of COVID-19 have limited, and are expected to continue to limit, our leasing activities, such as property tours, and may have a material adverse effect on our ability to renew leases, lease vacant space or re-lease available space as leases expire in our properties on favorable terms, or at all;

● COVID -19 has caused a material decline in general business activity and demand for real estate transactions, and if this persists, it would adversely affect our ability or desire to make strategic acquisitions or dispositions;

● the impact of recent and future efforts by state, local, federal and industry groups to enact laws and regulations have restricted, and may further restrict, the ability of landlords, such as us, to collect rent, enforce remedies for the failure to pay rent, or otherwise enforce the terms of the lease agreements, such as a rent freeze for tenants or a suspension of a landlord’s ability to enforce evictions;

● we may be unable to access debt and equity capital on attractive terms, or at all, and a further disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our tenants’ and our access to capital and other sources of funding necessary to fund our respective operations or address maturing liabilities on a timely basis;

44

● the financial effects of the COVID-19 pandemic on our future financial results, cash flows and financial condition could adversely impact our compliance with the financial covenants of our credit facility and other debt agreements and could result in an event of default and the acceleration of indebtedness, which could negatively impact our financial condition, results of operations and our ability to make additional borrowings and pay dividends;

● increased vulnerability to cyber-security threats and potential breaches, including phishing attacks, malware and impersonation tactics, resulting from the increase in numbers of individuals working from home;

● the potential that business interruption, loss of rental income and/or other associated expenses related to our operations will not be covered in whole or in part by our insurance policies, which may increase unreimbursed liabilities;

● if the health of our employees, particularly our key personnel and property management teams, are negatively impacted, we may be unable to ensure business continuity and be exposed to lawsuits from tenants;

● if we choose not to pay dividends, our holders of depositary receipts may have to pay income taxes on the Partnership’s income without receiving a corresponding amount of cash;

● uncertainly as to what conditions must be satisfied before government authorities lift “stay-at-home” orders and public health officials begin the process of gradually returning Americans to work and whether government authorities will impose (or suggest) requirements on landlords, such as us, to protect the health and safety of tenants and visitors to our buildings could result in increased operating costs and demands on our property management teams to ensure compliance with any such requirements, as well as increased costs associated with protecting against potential liability arising from these measures, such as claims by tenants that the measures violate their leases and claims by visitors that the measures caused them damages; and

● limited access to our facilities, management, tenants, support staff and professional advisors could decrease the effectiveness of our disclosure controls and procedures, internal controls over financial reporting and other risk mitigation strategies, increase our susceptibility to security breaches, hamper our ability to comply with regulatory obligations and prevent us from conducting our business as efficiently and effectively as we otherwise would have.

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 2020:

				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, 2020	$	42.95	78	571,561
May 1-31, 2020	$	—	—	571,561
June 1-30, 2020	$	—	—	571,561
Total			78

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

45

increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025.The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2020, the Partnership has repurchased 1,428,437 Depositary Receipts at an average price of $28.43 per receipt (or $852.90 per underlying Class A Unit), 3,572 Class B Units and 188 General Partnership Units, both at an average price of $1,033.00 per Unit, totaling approximately $44,718,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 42.18 Class B Units and 2.22 General Partnership units at a cost of $74,839 and $3,939 respectively. Given the economic uncertainty caused by the coronavirus issue, as of April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

See the exhibit index below.

46

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(31.1)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership).
(31.2)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Jameson Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and Jameson Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (eX tenable Business Property Language: (i) Consolidated Balance Sheets, (unaudited) (ii) Consolidated Statements of Income, (unaudited) (iii) Consolidated Statements of Changes in Partners’ Capital, (unaudited) (iv) Consolidated Statements of Cash Flows, (unaudited) and (v) Notes to Consolidated Financial Statements, (unaudited) (filed herewith).
(104)	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

47

SIGNATURES

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

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
By:	/s/ NEWREAL, INC.
	Its General Partner
By:	/s/ RONALD BROWN
	Ronald Brown, President
Dated: August 7, 2020

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 7, 2020
Ronald Brown	(Principal Executive Officer)
/s/ JAMESON BROWN	Treasurer and Director of the General Partner	August 7, 2020
Jameson Brown	(Principal Financial Officer and Principal Accounting Officer)
/s/ GUILLIAEM AERTSEN	Director of the General Partner	August 7, 2020
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	August 7, 2020
David Aloise
/s/ ANDREW BLOCH	Director of the General Partner	August 7, 2020
Andrew Bloch
/s/ EUNICE HARPS	Director of the General Partner	August 7, 2020
Eunice Harps
/s/ SALLY MICHAEL	Director of the General Partner	August 7, 2020
Sally Michael
/s/ ROBERT SOMMA	Director of the General Partner	August 7, 2020
Robert Somma

48

EX-31.1

Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

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

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

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

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

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

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

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

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

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

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

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

	/s/ RONALD BROWN
	Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2020

EX-31.2

Exhibit 31.2

New England Realty Associates Limited Partnership

CERTIFICATIONS

I, Jameson 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/ JAMESON BROWN
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2020

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the six months ended June 30, 2020, 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 Jameson Brown, the Treasurer and a Director of the Partnership’s General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	/s/ Ronald Brown
	Ronald Brown
	Principal Executive Officer
	(President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2020
	/s/ Jameson Brown
	Jameson Brown
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2020

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, 2020	Aug. 06, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2020
Entity File Number	001-31568
Entity Registrant Name	New England Realty Associates Limited Partnership
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2619298
Entity Address, Address Line One	39 Brighton Avenue
Entity Address, City or Town	Allston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02134
City Area Code	617
Local Phone Number	783-0039
Title of 12(b) Security	Class A
Trading Symbol	NEN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000746514
Amendment Flag	false
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		97,405
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		23,134

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2020	Dec. 31, 2019
ASSETS
Rental Properties	$ 271,417,401	$ 278,363,988
Cash and Cash Equivalents	15,396,023	7,546,324
Rents Receivable	1,014,905	484,610
Real Estate Tax Escrows	437,502	446,781
Prepaid Expenses and Other Assets	5,116,550	6,021,544
Investments in Unconsolidated Joint Ventures	1,453,894	1,430,402
Total Assets	294,836,275	294,293,649
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	284,402,031	281,771,246
Notes Payable	17,000,000	18,000,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	20,129,903	19,970,089
Accounts Payable and Accrued Expenses	3,597,414	4,274,266
Advance Rental Payments and Security Deposits	7,428,945	8,101,835
Total Liabilities	332,558,293	332,117,436
Partners' Capital 121,756 and 121,978 units outstanding in 2020 and 2019 respectively	(37,722,018)	(37,823,787)
Total Liabilities and Partners' Capital	$ 294,836,275	$ 294,293,649

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	121,756	121,978	122,391	124,386

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues
Rental income	$ 15,646,814	$ 14,886,423	$ 31,900,244	$ 29,654,899
Laundry and sundry income	112,292	104,980	234,446	218,649
Total Revenues	15,759,106	14,991,403	32,134,690	29,873,548
Expenses
Administrative	512,195	626,180	1,096,853	1,238,938
Depreciation and amortization	4,601,617	3,590,240	9,167,084	7,272,918
Management fee	615,541	597,197	1,264,534	1,187,806
Operating	1,291,781	1,125,813	2,960,183	3,009,831
Renting	128,608	242,515	325,479	424,573
Repairs and maintenance	2,049,174	2,287,313	4,135,392	4,231,544
Taxes and insurance	2,115,721	1,942,998	4,396,262	3,977,104
Total Expenses	11,314,637	10,412,256	23,345,787	21,342,714
Income Before Other Income (Expense)	4,444,469	4,579,147	8,788,903	8,530,834
Other Income (Expense)
Interest income	52	90	159	269
Interest expense	(3,423,583)	(3,133,439)	(6,873,908)	(6,133,728)
Income from investments in unconsolidated joint ventures	444,113	513,406	918,680	1,062,345
Other expense		(194,960)		(194,960)
Total Other Income (Expense)	(2,979,418)	(2,814,903)	(5,955,069)	(5,266,074)
Net Income	$ 1,465,051	$ 1,764,244	$ 2,833,834	$ 3,264,760
Income per Unit
Net Income per Unit (in dollars per unit)	$ 12.03	$ 14.40	$ 23.26	$ 26.61
Weighted Average Number of Units Outstanding (in units)	121,756	122,483	121,816	122,710

XML

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNER'S CAPITAL - USD ($)	3 Months Ended		6 Months Ended		142 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2019
Increase (Decrease) in Partners' Capital
Balance			$ (37,823,787)	$ (35,624,010)
Balance (in units)			121,978	124,386
Distribution to Partners			$ (2,338,034)	$ (2,352,443)
Stock Buyback			$ (394,031)	$ (3,305,651)	$ (44,718,000)
Stock Buyback (in units)			(222)	(1,995)
Net income	$ 1,465,051	$ 1,764,244	$ 2,833,834	$ 3,264,760
Balance	$ (37,722,018)	$ (38,017,344)	$ (37,722,018)	$ (38,017,344)	$ (38,017,344)
Balance (in units)	121,756	122,391	121,756	122,391	122,391
Subtotal
Increase (Decrease) in Partners' Capital
Balance (in units)			180,225	180,225
Balance (in units)	180,225	180,225	180,225	180,225	180,225
General Partnership
Increase (Decrease) in Partners' Capital
Balance			$ (376,827)	$ (354,833)
Balance (in units)			1,802	1,802
Distribution to Partners			$ (23,380)	$ (23,524)
Stock Buyback			(3,941)	(33,055)
Net income			28,338	32,648
Balance	$ (375,810)	$ (378,764)	$ (375,810)	$ (378,764)	$ (378,764)
Balance (in units)	1,802	1,802	1,802	1,802	1,802
Treasury Units
Increase (Decrease) in Partners' Capital
Balance (in units)			(58,247)	(55,839)
Stock Buyback (in units)			(222)	(1,995)
Balance (in units)	(58,469)	(57,834)	(58,469)	(57,834)	(57,834)
Class A
Increase (Decrease) in Partners' Capital
Balance			$ (30,287,245)	$ (28,527,352)
Balance (in units)			144,180	144,180
Distribution to Partners			$ (1,870,428)	$ (1,881,955)
Stock Buyback			(315,220)	(2,644,552)
Net income			2,267,068	2,611,808
Balance	$ (30,205,825)	$ (30,442,051)	$ (30,205,825)	$ (30,442,051)	$ (30,442,051)
Balance (in units)	144,180	144,180	144,180	144,180	144,180
Class B
Increase (Decrease) in Partners' Capital
Balance			$ (7,159,715)	$ (6,741,825)
Balance (in units)			34,243	34,243
Distribution to Partners			$ (444,226)	$ (446,964)
Stock Buyback			(74,870)	(628,044)
Net income			538,428	620,304
Balance	$ (7,140,383)	$ (7,196,529)	$ (7,140,383)	$ (7,196,529)	$ (7,196,529)
Balance (in units)	34,243	34,243	34,243	34,243	34,243

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities
Net income	$ 2,833,834	$ 3,264,759
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	9,167,084	7,272,918
Amortization of deferred finance costs	119,835	225,494
(Income) from investments in joint venture	(918,680)	(1,062,345)
Allowance for doubtful accounts	729,653	323,728
Change in operating assets and liabilities
Proceeds from unconsolidated joint ventures	5,000	770,000
(Increase) in rents receivable	(1,259,948)	(166,880)
Increrase (Decrease) in accounts payable and accrued expense	(676,850)	474,466
Decrease (Increase) in real estate tax escrow	9,279	49,347
Decrease (Increase) in prepaid expenses and other assets	188,556	(62,380)
Increase (Decrease) in advance rental payments and security deposits	(672,890)	822,139
Total Adjustments	6,691,039	8,646,487
Net cash provided by operating activities	9,524,873	11,911,246
Cash Flows From Investing Activities
Distribution in excess of investment in unconsolidated joint ventures	1,060,585	1,597,152
(Investment) in unconsolidated joint ventures	(10,585)	(19,152)
Improvement of rental properties	(1,504,059)	(1,715,987)
Net cash provided by (used in) investing activities	(454,059)	(137,987)
Cash Flows from Financing Activities
Payment of financing costs	(136,325)	(235,147)
Proceeds of mortgage notes payable	3,781,877	679,000
Principal payments of mortgage notes payable	(1,134,602)	(1,028,035)
Payment of note payable	(1,000,000)	(2,000,000)
Stock buyback	(394,031)	(3,305,651)
Distributions to partners	(2,338,034)	(2,352,443)
Net cash provided by (used in) provided by financing activities	(1,221,115)	(8,242,276)
Net Increase (Decrease) in Cash and Cash Equivalents	7,849,699	3,530,983
Cash and Cash Equivalents, at beginning of period	7,546,324	9,059,901
Cash and Cash Equivalents, at end of period	$ 15,396,023	$ 12,590,884

XML

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2020

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 29 properties which include 21 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,892 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40 - 50% interest in 7 residential and mixed use properties consisting of 688 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. 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 seven limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership”. Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 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 some investments fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 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. Revenue from commercial leases also include reimbursements and recoveries received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

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

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).

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

We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the

beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

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 $120,000 and $225,000 for the six months ended June 30, 2020 and 2019, 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 2020 or 2019 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 2020 or 2019. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2020, 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 0.03%. At June 30, 2020 and December 31, 2019, respectively approximately $15,636,000, and $7,407,000 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 $145,803 and $141,975 for the six months ended June 30, 2020 and 2019, 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, 2020 and 2019 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.

XML

RENTAL PROPERTIES

6 Months Ended

Jun. 30, 2020

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of June 30, 2020, the Partnership and its Subsidiary Partnerships owned 2,892 residential apartment units in 25 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, 2020, 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 seven residential and mixed use complexes (the “Investment Properties”) at June 30, 2020 with a total of 688 apartment 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, 2020		December 31, 2019		Useful Life
Land, improvements and parking lots	$	86,864,868	$	86,693,759	15	-	40	years
Buildings and improvements		253,113,482		252,896,183	15	-	40	years
Kitchen cabinets		17,633,302		17,376,841	5	-	10	years
Carpets		11,317,057		10,976,972	5	-	10	years
Air conditioning		573,389		573,389	5	-	10	years
Laundry equipment		709,210		709,210	5	-	7	years
Elevators		1,885,265		1,885,265	20	-	40	years
Swimming pools		1,092,194		1,092,194	10	-	30	years
Equipment		17,574,649		17,391,731	5	-	30	years
Motor vehicles		211,660		178,847			5	years
Fences		46,872		38,482	5	-	15	years
Furniture and fixtures		8,520,979		8,235,292	5	-	7	years
Smoke alarms		505,835		505,835	5	-	7	years
Total fixed assets		400,048,762		398,554,000
Less: Accumulated depreciation		(128,631,361)		(120,190,012)
	$	271,417,401	$	278,363,988

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, a wholly-owned subsidiary of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 in cash. Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan from Insurance Strategy Funding Corp. LLC described below. The closing costs were approximately $237,000. From the purchase price, the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of the initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain financial conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

XML

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2020

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 $1,265,000 and $1,188,000 for the six months ended June 30, 2020 and 2019, 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, 2020 and 2019, approximately $533,000 and $593,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2020 expenses referred to above, approximately $102,000 consisted of repairs and maintenance, and $126,000 of administrative expense. Approximately $305,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2020, the Hamilton Company received approximately $578,000 from the Investment Properties of which approximately $321,000 was the management fee, approximately $12,000 was for maintenance services, approximately $10,000 was for administrative services and

approximately $235,000 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 $1,738,000 and $1,668,000 for the six months ended June 30, 2020 and 2019, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. For the six months ended June 30, 2020, the Partnership accrued $22,000 for the employer’s match portion to the plan. For the six months ended June 30, 2019, the Partnership contributed $18,000 for the employer’s match portion to the plan.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2020 and 2019, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The Partnership has invested in seven limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are the Estate of Harold Brown, and five current and previous employees of the Management Company. The Brown Family related entities’ ownership interest was between 47.6% and 59%. See Note 14 for a description of the properties and their operations.

XML

PREPAID EXPENSES and OTHER ASSETS

6 Months Ended

Jun. 30, 2020

PREPAID EXPENSES and OTHER ASSETS

OTHER ASSETS

NOTE 4. PREPAID EXPENSES and OTHER ASSETS

Approximately $2,906,000, and $2,936,000 of security deposits are included in prepaid expenses and other assets at June 30, 2020 and December 31, 2019, respectively. The security deposits and escrow accounts are restricted cash.

Also, included in prepaid expenses and other assets at June 30, 2020 and December 31, 2019 is approximately $769,000 and $501,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisitions of Mill Street Apartments and Webster Green Apartments are included in prepaid expenses and other assets. Intanbible assets are approximately $715,000 net of accumulated amortization of approximately $845,000 and approximately $1,382,000 net of accumulated amortization of approximately $178,000 at June 30, 2020 and December 31, 2019, respectively.

Financing fees in association with the line of credit of approximately $15,000 and $36,000 are net of accumulated amortization of approximately $114,000 and $93,000 at June 30, 2020 and December 31, 2019 respectively.

XML

MORTGAGE NOTES PAYABLE

6 Months Ended

Jun. 30, 2020

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2020 and December 31, 2019, 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, 2020, the interest rates on these loans ranged from 3.53% to 5.66%, payable in monthly installments aggregating approximately $1,257,000 including principal, to various dates through 2035. The majority of the mortgages are subject to prepayment penalties. At June 30, 2020, the weighted average interest rate on the above mortgages was 4.42%. The effective rate of 4.51% 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 $1,465,000 and $1,449,000 are net of accumulated amortization of approximately $1,444,000 and $1,411,000 at June 30, 2020 and December 31, 2019, respectively offset the total mortgage notes payable.

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

Approximate annual maturities at June 30, 2020 are as follows:

2021—current maturities	$	2,357,000
2022		2,542,000
2023		79,930,000
2024		25,419,000
2025		11,027,000
Thereafter		164,592,000
		285,867,000
Less: unamortized deferred financing costs		(1,465,000)
	$	284,402,000

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on April 1, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with the remaining portion of the proceeds added to cash reserves. In connection with this refinancing, there were closing costs of approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price, the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

On May 31, 2019, Residences at Captain Parker, LLC (“Captain Parker”), entered into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of $20,750,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 4.05% per annum, and the principal amount of the Note is due and payable on June 1, 2029. The Note is secured by a mortgage on the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane, Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2019. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker used the proceeds of the loan to pay off an outstanding loan of approximately $20,071,000. In connection with this refinancing, the property incurred a prepayment penalty of approximately $202,000. This expense was included in other expense on the consolidated statement of income.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was

extended until October 31, 2020. Management is currently working with the lender on a three year extension for the credit line. The costs associated with the line of credit extension were approximately $128,000.

On December 19, 2019, the Partnership drew down on the line of credit in the amount of $20,000,000, used in conjunction with the purchase of Mill Street Apartments. On December 20, 2019, the Partnership paid down $2,000,000. On January 22, 2020, the Partnership paid down $1,000,000. As of June 30, 2020, the line of credit had an outstanding balance of $17,000,000.

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 $5,000 in fees for the six months ended June 30, 2020.

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, 2020.

XML

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

6 Months Ended

Jun. 30, 2020

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, 2020, amounts received for prepaid rents of approximately $2,138,000 are included in cash and cash equivalents, and security deposits of approximately $2,906,000 are included in prepaid expenses and other assets and are restricted cash.

XML

PARTNERS' CAPITAL

6 Months Ended

Jun. 30, 2020

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 January 2020, the Partnership approved a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2020 and payable on March 31, 2020, of $9.60 per unit ($0.32 per receipt).

In April 2020, the Partnership approved a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of June 15, 2020 and payable on June 30, 2020, of $9.60 per unit ($0.32 per receipt).

In 2019, regular quarterly distributions of $9.60 per unit ($0.32 per receipt), were paid in March, June, September and December.

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,
	2020		2019
Net Income per Depositary Receipt	$	0.78	$	0.89
Distributions per Depositary Receipt	$	0.64	$	0.64

XML

TREASURY UNITS

6 Months Ended

Jun. 30, 2020

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2020 are as follows:

Class A	46,775
Class B	11,109
General Partnership	585
	58,469

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). Over time, the General Partner has authorized increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2020, the Partnership has repurchased 1,428,437 Depositary Receipts at an average price of $28.43 per receipt (or $852.90 per underlying Class A Unit), 3,572 Class B Units and 188 General Partnership Units, both at an average price of $1,033.00 per Unit, totaling approximately $44,718,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 42.18 Class B Units and 2.22 General Partnership units at a cost of $74,839 and $3,939 respectively.

Given the economic uncertainty caused by the coronavirus issue, as of April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2020

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.

XML

RENTAL INCOME

6 Months Ended

Jun. 30, 2020

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2020, approximately 95% 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 5% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2020 as follows:

	Commercial
	Property Leases
2021	$	2,659,000
2022		1,727,000
2023		1,316,000
2024		827,000
2025		242,000
Thereafter		581,000
	$	7,352,000

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 $251,000 and $277,000 for the six months ended June 30, 2020 and 2019 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 26% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2021	$	759,320	39,256	18	27	%
2022		605,587	24,225	8	21	%
2023		421,687	11,481	7	15	%
2024		491,548	14,668	8	17	%
2025		414,562	14,674	7	15	%
2026		—	—	—	—	%
2027		—	—	—	—	%
2028		—	—	—	—	%
2029		—	—	—	—	%
2030		142,450	3,850	1	5	%
Totals	$	2,835,154	108,154	49	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $730,000 and $240,000 at June 30, 2020 and December 31, 2019. Included in rents receivable at June 30, 2020 is approximately $96,000 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, Cypress Street, and Staples Plaza in Massachusetts.

Rents receivable at June 30, 2020 also includes approximately $172,000 representing the deferral of rental concession primarily related to the residential properties.

XML

CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2020

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2020 and 2019, cash paid for interest was approximately $6,611,000, and $5,936,000 respectively. Cash paid for state income taxes was approximately $81,000 and $76,000 during the six months ended June 30, 2020 and 2019 respectively. Additionally, during the six months ended June 30, 2020, the Partnership was involved in a non-cash financing activity of approximately $2,393,000 in connection with the refinancing of Brookside Apartments.

XML

FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2020

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2020 and December 31, 2019, 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, 2020 and December 31, 2019 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, 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, 2020	*	$	284,402,031	$	305,678,933
At December 31, 2019	*	$	281,771,246	$	290,892,652
Investment Properties
At June 30, 2020	*	$	166,357,134	$	179,496,478
At December 31, 2019	*	$	166,404,255	$	169,988,236

* 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, 2020 and December 31, 2019. 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, 2020 and current estimates of fair value may differ significantly from the amounts presented herein.

XML

TAXABLE INCOME AND TAX BASIS

6 Months Ended

Jun. 30, 2020

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, different depreciation methods, different tax lives, other items with limited tax deductibility and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Federal taxable income of approximately $2,039,000 was approximately $4,508,000 less than statement income for the year ended December 31, 2019. The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2019 is approximately $5,311,000 less than the statement basis. The primary reasons for the difference in tax basis are tax free exchanges, accelerated depreciation and bonus depreciation. The Partnership’s Federal tax basis in its joint venture investments is approximately $1,688,000 more than statement basis. State taxable income may be significantly different due to different tax treatments for certain items.

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

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

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, 2020, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2016 forward.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The act, among other changes,  increases the business interest expense limitation to 50% of adjusted taxable income for tax years beginning in 2020 for partnerships.   

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

6 Months Ended

Jun. 30, 2020

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are the Brown Family related entities and five current and former employees of the Management Company. Harold Brown’s ownership interest was between 47.6% and 59%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, Hamilton Park Towers LLC, referred to as Dexter Park, or Hamilton Park, is a 409 unit residential complex. The purchase price was $129,500,000. The original mortgage was $89,914,000 with an interest rate of 5.57% and was to mature in 2019. The mortgage called for interest only payments for the first two years of the loan and amortized over 30 years thereafter.

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

Hamilton Park used the proceeds of the loan to pay off an outstanding loan of approximately $82,000,000 and distributed approximately $41,200,000 to its’ owners. The Partnership’s share of the distribution was approximately $16,500,000. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will

continue to account for the investment using the equity method of accounting, although the Partnership has no legal obligation to fund its’ share of any future operating deficiencies as needed. In connection with this refinancing, the property incurred a defeasance charge of approximately $3,830,000. Based on its’ ownership in the property, the Partnership incurred 40% of this charge, an expense of approximately $1,532,000.

At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is $125,000,000. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On 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 10 year mortgage in the original 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 with a maturity date of 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. After paying off the mortgage, the Partnership sold the individual units. 3 units were sold in 2019, resulting in a gain of approximately $429,000. In 2019, all units were sold by this Joint Venture. This investment is referred to as Hamilton Bay Apartments, 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 only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is approximately $10,000,000. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Joint Venture sold 127 of the units as condominiums and retained 49 units for long-term investment. The Joint Venture obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Joint Venture. The interest on the new loan was 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. On July 8, 2016, Hamilton 1025 LLC paid off the outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. After paying off the mortgage, the Partnership began to sell off the individual units. 2 units were sold in 2019, resulting in a gain of approximately $306,000. In 2019, all residential units were sold. The Partnership still owns the commercial building. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. 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. At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is approximately $6,000,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. 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, 2020, the balance of the mortgage before unamortized deferred finance $16,900,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. The investment is referred to as Hamilton on Main LLC.

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, 2020, the balance of this mortgage before unamortized deferred financing costs is approximately $9,253,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of June 30, 2020

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	6,866,502		$	2,591,904		$	5,513,615		$	86,451		$	5,160,011		$	15,570,896		$	82,374,300		$	118,163,679
Cash & Cash Equivalents		368,053			85,827			243,868			20,661			162,471			553,842			3,049,217			4,483,939
Rent Receivable		343,831			43,854			6,827			—			1,407			56,713			283,270			735,902
Real Estate Tax Escrow		62,383			—			21,487			—			25,341			72,097			—			181,308
Prepaid Expenses & Other Assets		308,350			89,788			99,498			2,341			33,062			175,465			1,857,159			2,565,663
Total Assets	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,927,607		$	—		$	9,199,730		$	—		$	5,908,276		$	16,833,120		$	124,488,401		$	166,357,134
Accounts Payable & Accrued Expense		72,016			1,599			89,688			11,438			64,549			157,567			963,724			1,360,581
Advance Rental Pmts & Security Deposits		300,200			—			308,520			—			147,506			440,458			2,682,182			3,878,866
Total Liabilities		10,299,823			1,599			9,597,938			11,438			6,120,331			17,431,145			128,134,307			171,596,581
Partners’ Capital		(2,350,704)			2,809,774			(3,712,643)			98,015			(738,039)			(1,002,132)			(40,570,361)			(45,466,090)
Total Liabilities and Capital	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures				$	1,404,887					$	49,008												1,453,895
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,175,352)		$	—		$	(1,856,321)		$	—		$	(369,020)		$	(501,066)		$	(16,228,145)			(20,129,903)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(18,676,009)
Total units/condominiums
Apartments		48			—			40			175			42			148			409			862
Commercial		1			1			—			1			—			—			—			3
Total		49			1			40			176			42			148			409			865
Units to be retained		49			1			40			1			42			148			409			690
Units to be sold		—			—			—			—			—			—			—			—
Units sold through August 1, 2020		—			—			—			175			—			—			—			175
Unsold units		—			—			—			—			—			—			—			—
Unsold units with deposits for future sale as of August 1, 2020		—			—			—			—			—			—			—			—

Financial information for the six months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	820,088	$	65,862	$	847,492	$	41,117	$	581,210	$	1,803,314		8,230,449	$	12,389,532
Laundry and Sundry Income		6,683		—		625		—		626		17,355		45,708		70,997
		826,771		65,862		848,117		41,117		581,836		1,820,669		8,276,157		12,460,529
Expenses
Administrative		11,480		2,200		16,328		11,056		6,650		29,475		92,773		169,962
Depreciation and Amortization		243,569		10,149		169,036		1,632		173,780		524,133		1,838,920		2,961,219
Management Fees		28,052		2,203		32,296		1,645		23,004		67,729		166,246		321,175
Operating		46,299		—		28,764		96		50,654		177,595		529,844		833,252
Renting		3,404		—		9,682		—		5,750		15,493		30,883		65,212
Repairs and Maintenance		67,209		3,046		43,375		—		38,950		233,991		511,248		897,819
Taxes and Insurance		129,401		30,457		79,714		8,680		72,176		232,474		1,138,952		1,691,854
		529,414		48,055		379,195		23,109		370,964		1,280,890		4,308,866		6,940,493
Income Before Other Income		297,357		17,807		468,922		18,008		210,872		539,779		3,967,291		5,520,036
Other Income (Loss)
Interest Expense		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
Net Income (Loss)	$	125,266	$	17,807	$	282,514	$	18,008	$	92,370	$	156,992	$	1,430,505	$	2,123,462
Net Income (Loss)—NERA 50%	$	62,632	$	8,903	$	141,257	$	9,004	$	46,185	$	78,495				346,476
Net Income —NERA 40%													$	572,202		572,202
															$	918,678

Financial information for the three months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	380,708	$	5,391	$	419,342	$	20,558	$	290,517	$	897,613	$	4,023,946	$	6,038,075
Laundry and Sundry Income		3,298		—		171		—		626		8,606		19,966		32,667
		384,006		5,391		419,513		20,558		291,143		906,219		4,043,912		6,070,742
Expenses
Administrative		5,293		1,550		8,572		931		4,168		13,627		45,721		79,862
Depreciation and Amortization		121,927		5,075		84,541		816		86,954		263,086		921,932		1,484,331
Management Fees		10,316		—		15,829		822		11,472		32,745		79,163		150,347
Operating		20,776		—		15,776		51		28,428		83,750		219,463		368,244
Renting		629		—		929		—		2,750		7,773		14,080		26,161
Repairs and Maintenance		40,200		3,046		21,797		—		28,056		99,155		224,236		416,490
Taxes and Insurance		64,724		15,238		39,808		4,492		36,125		109,712		562,731		832,830
		263,865		24,909		187,252		7,112		197,953		609,848		2,067,326		3,358,265
Income Before Other Income		120,141		(19,518)		232,261		13,446		93,190		296,371		1,976,586		2,712,477
Other Income (Loss)
Interest Expense		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Interest Income		—		—		—		—		—		—		—		—
Gain on sale of real estate		—		—		—				—		—		—		—
		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Net Income (Loss)	$	48,783	$	(19,518)	$	139,278	$	13,446	$	33,948	$	105,967	$	707,904	$	1,029,808
Net Income (Loss)—NERA 50%	$	24,392	$	(9,758)	$	69,639	$	6,723	$	16,974	$	52,984				160,953
Net Income (Loss)—NERA 40%													$	283,162		283,162
															$	444,115

Future annual mortgage maturities at June 30, 2020 are as follows:

	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
6/30/2021	$	—	$	209,541	$		$	—	$		$	209,541
6/30/2022		—		217,796				—				217,796
6/30/2023		—		226,376		—		—				226,376
6/30/2024		—		235,293		—		—				235,293
6/30/2025		—		244,563		—		16,900,000				17,144,563
Thereafter		10,000,000		8,119,429		6,000,000		—		125,000,000		149,119,429
		10,000,000		9,252,998		6,000,000		16,900,000		125,000,000		167,152,998
Less: unamortized deferred financing costs		(72,393)		(53,268)		(91,724)		(66,880)		(511,599)		(795,864)
	$	9,927,607	$	9,199,730	$	5,908,276	$	16,833,120	$	124,488,401	$	166,357,134

At June 30, 2020 the weighted average interest rate on the above mortgages was 3.91%. The effective rate was 3.98% including the amortization expense of deferred financing costs.

Summary financial information at June 30, 2019

				Hamilton												Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,009,806		$	2,594,393		$	5,833,501		$	89,352		$			$	5,479,383		$	16,288,449		$	85,469,775		$	122,764,659
Cash & Cash Equivalents		371,049			141,625			223,371			271,833			19,616			132,837			166,951			2,443,433			3,770,715
Rent Receivable		246,158			21,570			4,240			—			—			480			22,923			99,756			395,127
Real Estate Tax Escrow		74,605			—			20,314			—			—			27,807			96,530			—			219,256
Prepaid Expenses & Other Assets		286,887			107,376			60,279			1,199			5,189			14,264			213,740			1,216,087			1,905,021
Total Assets	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,913,818		$	—		$	9,394,671		$	—		$	—		$	5,900,093		$	16,817,068		$	124,423,778		$	166,449,428
Accounts Payable & Accrued Expense		121,192			2,811			82,534			18,162			4,048			56,897			232,031			799,246			1,316,921
Advance Rental Pmts& Security Deposits		311,817			—			322,013			6,305			101			129,339			441,388			3,224,176			4,435,139
Total Liabilities		10,346,827			2,811			9,799,218			24,467			4,149			6,086,329			17,490,487			128,447,200			172,201,488
Partners’ Capital		(2,358,322)			2,862,153			(3,657,513)			337,917			20,656			(431,558)			(701,894)			(39,218,149)			(43,146,710)
Total Liabilities and Capital	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,431,077		$	—		$	168,959		$	10,327		$	—		$	—		$	—			1,610,362
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,179,161)		$	—		$	(1,828,757)		$	—		$	—		$	(215,779)		$	(350,947)		$	(15,687,260)			(19,261,903)
Total Investment in Unconsolidated Joint Ventures (Net)																									$	(17,651,541)
Total units/condominiums
Apartments		48			—			40			175			48			42			148			409			910
Commercial		1			1			—			1			—			—			—			—			3
Total		49			1			40			176			48			42			148			409			913
Units to be retained		49			1			40			1			—			42			148			409			690
Units to be sold		—			—			—			175			48			—			—			—			223
Units sold through August 1, 2019		—			—			—			171			44			—			—			—			215
Unsold units		—			—			—			4			4			—			—			—			8
Unsold units with deposits for future sale as of August 1, 2019		—			—			—			1			2			—			—			—			3

Financial information for the six months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	910,111	$	101,241	$	803,093	$	47,061	$	3,629	$	556,069	$	1,688,003	$	8,060,966	$	12,170,173
Laundry and Sundry Income		6,870		—		584		—		—		2,135		20,080		48,720		78,389
		916,981		101,241		803,677		47,061		3,629		558,204		1,708,083		8,109,686		12,248,562
Expenses
Administrative		15,255		9,674		10,043		4,402		4,214		5,750		34,912		95,917		180,167
Depreciation and Amortization		239,432		10,149		172,453		6,391		5,420		177,501		519,106		1,807,214		2,937,666
Management Fees		34,227		4,320		30,443		1,899		145		22,299		65,003		168,653		326,989
Operating		37,045		8		40,524		862		—		51,579		191,817		599,340		921,175
Renting		8,517		—		11,993		—		—		2,574		33,490		54,549		111,123
Repairs and Maintenance		64,670		3,180		42,277		28,399		10,266		82,321		317,086		563,942		1,112,141
Taxes and Insurance		123,306		30,860		75,609		14,445		5,206		64,769		207,339		1,035,769		1,557,303
		522,452		58,191		383,342		56,398		25,251		406,793		1,368,753		4,325,384		7,146,564
Income Before Other Income		394,529		43,050		420,335		(9,337)		(21,622)		151,411		339,330		3,784,302		5,101,998
Other Income (Loss)
Interest Expense		(243,020)		—		(189,082)		—		(6)		(116,605)		(380,539)		(2,537,735)		(3,466,987)
Gain on Sale of Real Estate		—		—		—		306,075		432,908		—		—		—		738,983
		(243,020)		—		(189,082)		306,075		432,902		(116,605)		(380,539)		(2,537,735)		(2,728,004)
Net Income (Loss)	$	151,509	$	43,050	$	231,253	$	296,738	$	411,280	$	34,806	$	(41,209)	$	1,246,567	$	2,373,994
Net Income (Loss)—NERA 50%	$	75,755	$	21,525	$	115,627	$	148,369	$	205,641	$	17,403	$	(20,605)				563,715
Net Income (Loss)—NERA 40%															$	498,630		498,630
																	$	1,062,345

Financial information for the three months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	450,538	$	25,951	$	417,850	$	23,466	$	—	$	281,232	$	865,335	$	4,032,707	$	6,097,079
Laundry and Sundry Income		3,865		—		(805)		—		—		228		10,018		24,695		38,001
		454,403		25,951		417,045		23,466		—		281,460		875,353		4,057,402		6,135,080
Expenses
Administrative		9,876		7,582		4,653		2,708		841		2,034		17,065		40,385		85,144
Depreciation and Amortization		119,887		5,075		86,226		3,195		—		88,906		260,668		907,113		1,471,070
Management Fees		17,021		2,160		16,387		934		—		11,232		33,135		82,504		163,373
Operating		15,594		—		17,921		88		37		27,824		84,527		217,696		363,687
Renting		5,187		—		8,473		—		—		542		17,378		34,886		66,466
Repairs and Maintenance		26,786		3,180		23,810		20,359		—		45,649		192,894		307,357		620,035
Taxes and Insurance		61,476		15,183		35,369		7,096		300		32,518		102,907		517,043		771,892
		255,827		33,180		192,839		34,380		1,178		208,705		708,574		2,106,984		3,541,667
Income Before Other Income		198,576		(7,229)		224,206		(10,914)		(1,178)		72,755		166,779		1,950,418		2,593,413
Other Income (Loss)
Interest Expense		(122,015)		—		(94,834)		—		—		(58,613)		(192,271)		(1,267,633)		(1,735,366)
Interest Income		—		—		—		305,320		—		—		—		—		305,320
		(122,015)		—		(94,834)		305,320		—		(58,613)		(192,271)		(1,267,633)		(1,430,046)
Net Income (Loss)	$	76,561	$	(7,229)	$	129,372	$	294,406	$	(1,178)	$	14,142	$	(25,492)	$	682,784	$	1,163,367
Net Income (Loss)—NERA 50%	$	38,281	$	(3,614)	$	64,686	$	147,203	$	(589)	$	7,071	$	(12,746)				240,292
Net Income (Loss)—NERA 40%															$	273,114		273,114
																	$	513,406

XML

EMPLOYEE BENEFIT 401(k) PLANS

6 Months Ended

Jun. 30, 2020

EMPLOYEE BENEFTI 401(k) PLANS

EMPLOYEE BENEFIT 401(k) PLANS

NOTE 15. EMPLOYEE BENEFIT 401(k) PLANS

Effective January 1, 2019, employees of the Partnership, who meet certain minimum age and service requirements, are eligible to participate in the Management Company’s 401(k) Plan (the “401(k) Plan”).  Eligible employees may elect to defer up to 90 percent of their eligible compensation on a pre-tax basis to the 401(k) Plan, subject to certain limitations imposed by federal law. 

The amounts contributed by employees are immediately vested and non-forfeitable.  Beginning January 1, 2019, the Partnership matched 50% up to 6% of compensation deferred by each employee in the 401(k) plan. The Partnership may make discretionary matching or profit-sharing contributions to the 401(k) Plan on behalf of eligible participants in any plan year.  Participants are always 100 percent vested in their pre-tax contributions and will begin vesting in any matching or profit-sharing contributions made on their behalf after two years of service with the Partnership at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Partnership. Total expense recognized by the Partnership for the 401(k) Plan for the six months ended June 30, 2020 was $22,000.

XML

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2020

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 16. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In April 2020, the FASB issued a Staff Question & Answer (“Q&A”) which was intended to reduce the challenges of evaluating the enforceable rights and obligations of leases for concessions granted to lessees in response to the novel coronavirus disease (“COVID-19”), which was characterized on March 11, 2020 by the World Health Organization as a pandemic. Prior to this guidance, the Partnership was required to determine, on a lease by lease basis, if a lease concession should be accounted for as a lease modification, potentially resulting in any lease concessions granted being recorded as a reduction to revenue on a straight-line basis over the remaining terms of the leases. The Q&A allows both lessors and lessees to bypass this analysis and elect not to evaluate whether concessions provided in response to the COVID-19 pandemic are lease modifications. This relief is subject to certain conditions being met, including ensuring the total remaining lease payments are substantially the same or less as compared to the original lease payments prior to the concession being granted. The Partnership has elected to apply such relief and will therefore not evaluate if lease concessions that were granted in response to the COVID-19 pandemic meet the definition of a lease modification.  Accordingly, the Partnership accounted for qualifying rent concessions as negative variable lease payments, which reduced revenue from such leases in the period the concessions were granted.

XML

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2020

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 17—SUBSEQUENT EVENTS

From July 1, 2020 through August 6, 2020, the Partnership purchased no Depository Receipts.

The current outbreak of the COVID-19 virus, which was characterized on March 11, 2020 by the World Health Organization as a pandemic, has currently resulted in a worldwide health crisis, which is adversely affecting international, national and local economies and financial markets generally, and continues to have an unprecedented effect on the rental housing and commercial property markets. Given the continuous evolution of the COVID-019 pandemic and the global response to curb its spread, the Partnership is not able to estimate the resulting effects on its results of operations, cash flows, financial condition, or liquidity for the year ending December 31, 2020 or beyond.

The Government’s measures put into place to combat the spread of the virus have caused significant disruptions to life and business operations in Massachusetts, the country and the world. The length and severity of the current recession and the effects on the Partnership’s business are unknown at this time.

During the current state of emergency, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants. Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe. Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services. Leasing is limited to unoccupied units and a web based video technology is being used to remotely show apartments. Hamilton and the Partnership will continue to adjust their business practices to comply with Federal and State mandates for workplace and rental property operations.

Massachusetts has passed an emergency law to stop evictions during the Covid-19 state of emergency.The moratorium has been extended through October17, 2020.Past due rents receivable have increased and the Partnership is currently experiencing significantly higher vacancies for the upcoming rental season.

XML

SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2020

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 29 properties which include 21 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,892 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40 - 50% interest in 7 residential and mixed use properties consisting of 688 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation

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 seven limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership”. Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 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 some investments fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 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. Revenue from commercial leases also include reimbursements and recoveries received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

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

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).

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

We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the

beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

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 Deferred Financing Costs

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 $120,000 and $225,000 for the six months ended June 30, 2020 and 2019, 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 2020 or 2019 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 2020 or 2019. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2020, 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 0.03%. At June 30, 2020 and December 31, 2019, respectively approximately $15,636,000, and $7,407,000 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 $145,803 and $141,975 for the six months ended June 30, 2020 and 2019, 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, 2020 and 2019 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.

XML

RENTAL PROPERTIES (Tables)

6 Months Ended

Jun. 30, 2020

RENTAL PROPERTIES

Schedule of rental properties

	June 30, 2020		December 31, 2019		Useful Life
Land, improvements and parking lots	$	86,864,868	$	86,693,759	15	-	40	years
Buildings and improvements		253,113,482		252,896,183	15	-	40	years
Kitchen cabinets		17,633,302		17,376,841	5	-	10	years
Carpets		11,317,057		10,976,972	5	-	10	years
Air conditioning		573,389		573,389	5	-	10	years
Laundry equipment		709,210		709,210	5	-	7	years
Elevators		1,885,265		1,885,265	20	-	40	years
Swimming pools		1,092,194		1,092,194	10	-	30	years
Equipment		17,574,649		17,391,731	5	-	30	years
Motor vehicles		211,660		178,847			5	years
Fences		46,872		38,482	5	-	15	years
Furniture and fixtures		8,520,979		8,235,292	5	-	7	years
Smoke alarms		505,835		505,835	5	-	7	years
Total fixed assets		400,048,762		398,554,000
Less: Accumulated depreciation		(128,631,361)		(120,190,012)
	$	271,417,401	$	278,363,988

XML

MORTGAGE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2020

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at June 30, 2020 are as follows:

2021—current maturities	$	2,357,000
2022		2,542,000
2023		79,930,000
2024		25,419,000
2025		11,027,000
Thereafter		164,592,000
		285,867,000
Less: unamortized deferred financing costs		(1,465,000)
	$	284,402,000

XML

PARTNERS' CAPITAL (Tables)

6 Months Ended

Jun. 30, 2020

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Six Months Ended
	June 30,
	2020		2019
Net Income per Depositary Receipt	$	0.78	$	0.89
Distributions per Depositary Receipt	$	0.64	$	0.64

XML

TREASURY UNITS (Tables)

6 Months Ended

Jun. 30, 2020

TREASURY UNITS

Schedule of treasury units

Treasury Units at June 30, 2020 are as follows:

Class A	46,775
Class B	11,109
General Partnership	585
	58,469

XML

RENTAL INCOME (Tables)

6 Months Ended

Jun. 30, 2020

RENTAL INCOME

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

	Commercial
	Property Leases
2021	$	2,659,000
2022		1,727,000
2023		1,316,000
2024		827,000
2025		242,000
Thereafter		581,000
	$	7,352,000

Schedule of information for commercial leases

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2021	$	759,320	39,256	18	27	%
2022		605,587	24,225	8	21	%
2023		421,687	11,481	7	15	%
2024		491,548	14,668	8	17	%
2025		414,562	14,674	7	15	%
2026		—	—	—	—	%
2027		—	—	—	—	%
2028		—	—	—	—	%
2029		—	—	—	—	%
2030		142,450	3,850	1	5	%
Totals	$	2,835,154	108,154	49	100	%

XML

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020

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, 2020	*	$	284,402,031	$	305,678,933
At December 31, 2019	*	$	281,771,246	$	290,892,652
Investment Properties
At June 30, 2020	*	$	166,357,134	$	179,496,478
At December 31, 2019	*	$	166,404,255	$	169,988,236

* Net of unamortized deferred financing costs

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of future annual mortgage maturities

Future annual mortgage maturities at June 30, 2020 are as follows:

	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
6/30/2021	$	—	$	209,541	$		$	—	$		$	209,541
6/30/2022		—		217,796				—				217,796
6/30/2023		—		226,376		—		—				226,376
6/30/2024		—		235,293		—		—				235,293
6/30/2025		—		244,563		—		16,900,000				17,144,563
Thereafter		10,000,000		8,119,429		6,000,000		—		125,000,000		149,119,429
		10,000,000		9,252,998		6,000,000		16,900,000		125,000,000		167,152,998
Less: unamortized deferred financing costs		(72,393)		(53,268)		(91,724)		(66,880)		(511,599)		(795,864)
	$	9,927,607	$	9,199,730	$	5,908,276	$	16,833,120	$	124,488,401	$	166,357,134

At June 30, 2020 the weighted average interest rate on the above mortgages was 3.91%. The effective rate was 3.98% including the amortization expense of deferred financing costs.

2020

Summary of financial position and income statements relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2020

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	6,866,502		$	2,591,904		$	5,513,615		$	86,451		$	5,160,011		$	15,570,896		$	82,374,300		$	118,163,679
Cash & Cash Equivalents		368,053			85,827			243,868			20,661			162,471			553,842			3,049,217			4,483,939
Rent Receivable		343,831			43,854			6,827			—			1,407			56,713			283,270			735,902
Real Estate Tax Escrow		62,383			—			21,487			—			25,341			72,097			—			181,308
Prepaid Expenses & Other Assets		308,350			89,788			99,498			2,341			33,062			175,465			1,857,159			2,565,663
Total Assets	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,927,607		$	—		$	9,199,730		$	—		$	5,908,276		$	16,833,120		$	124,488,401		$	166,357,134
Accounts Payable & Accrued Expense		72,016			1,599			89,688			11,438			64,549			157,567			963,724			1,360,581
Advance Rental Pmts & Security Deposits		300,200			—			308,520			—			147,506			440,458			2,682,182			3,878,866
Total Liabilities		10,299,823			1,599			9,597,938			11,438			6,120,331			17,431,145			128,134,307			171,596,581
Partners’ Capital		(2,350,704)			2,809,774			(3,712,643)			98,015			(738,039)			(1,002,132)			(40,570,361)			(45,466,090)
Total Liabilities and Capital	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures				$	1,404,887					$	49,008												1,453,895
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,175,352)		$	—		$	(1,856,321)		$	—		$	(369,020)		$	(501,066)		$	(16,228,145)			(20,129,903)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(18,676,009)
Total units/condominiums
Apartments		48			—			40			175			42			148			409			862
Commercial		1			1			—			1			—			—			—			3
Total		49			1			40			176			42			148			409			865
Units to be retained		49			1			40			1			42			148			409			690
Units to be sold		—			—			—			—			—			—			—			—
Units sold through August 1, 2020		—			—			—			175			—			—			—			175
Unsold units		—			—			—			—			—			—			—			—
Unsold units with deposits for future sale as of August 1, 2020		—			—			—			—			—			—			—			—

Financial information for the six months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	820,088	$	65,862	$	847,492	$	41,117	$	581,210	$	1,803,314		8,230,449	$	12,389,532
Laundry and Sundry Income		6,683		—		625		—		626		17,355		45,708		70,997
		826,771		65,862		848,117		41,117		581,836		1,820,669		8,276,157		12,460,529
Expenses
Administrative		11,480		2,200		16,328		11,056		6,650		29,475		92,773		169,962
Depreciation and Amortization		243,569		10,149		169,036		1,632		173,780		524,133		1,838,920		2,961,219
Management Fees		28,052		2,203		32,296		1,645		23,004		67,729		166,246		321,175
Operating		46,299		—		28,764		96		50,654		177,595		529,844		833,252
Renting		3,404		—		9,682		—		5,750		15,493		30,883		65,212
Repairs and Maintenance		67,209		3,046		43,375		—		38,950		233,991		511,248		897,819
Taxes and Insurance		129,401		30,457		79,714		8,680		72,176		232,474		1,138,952		1,691,854
		529,414		48,055		379,195		23,109		370,964		1,280,890		4,308,866		6,940,493
Income Before Other Income		297,357		17,807		468,922		18,008		210,872		539,779		3,967,291		5,520,036
Other Income (Loss)
Interest Expense		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
Net Income (Loss)	$	125,266	$	17,807	$	282,514	$	18,008	$	92,370	$	156,992	$	1,430,505	$	2,123,462
Net Income (Loss)—NERA 50%	$	62,632	$	8,903	$	141,257	$	9,004	$	46,185	$	78,495				346,476
Net Income —NERA 40%													$	572,202		572,202
															$	918,678

Financial information for the three months ended June 30, 2020

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	380,708	$	5,391	$	419,342	$	20,558	$	290,517	$	897,613	$	4,023,946	$	6,038,075
Laundry and Sundry Income		3,298		—		171		—		626		8,606		19,966		32,667
		384,006		5,391		419,513		20,558		291,143		906,219		4,043,912		6,070,742
Expenses
Administrative		5,293		1,550		8,572		931		4,168		13,627		45,721		79,862
Depreciation and Amortization		121,927		5,075		84,541		816		86,954		263,086		921,932		1,484,331
Management Fees		10,316		—		15,829		822		11,472		32,745		79,163		150,347
Operating		20,776		—		15,776		51		28,428		83,750		219,463		368,244
Renting		629		—		929		—		2,750		7,773		14,080		26,161
Repairs and Maintenance		40,200		3,046		21,797		—		28,056		99,155		224,236		416,490
Taxes and Insurance		64,724		15,238		39,808		4,492		36,125		109,712		562,731		832,830
		263,865		24,909		187,252		7,112		197,953		609,848		2,067,326		3,358,265
Income Before Other Income		120,141		(19,518)		232,261		13,446		93,190		296,371		1,976,586		2,712,477
Other Income (Loss)
Interest Expense		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Interest Income		—		—		—		—		—		—		—		—
Gain on sale of real estate		—		—		—				—		—		—		—
		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Net Income (Loss)	$	48,783	$	(19,518)	$	139,278	$	13,446	$	33,948	$	105,967	$	707,904	$	1,029,808
Net Income (Loss)—NERA 50%	$	24,392	$	(9,758)	$	69,639	$	6,723	$	16,974	$	52,984				160,953
Net Income (Loss)—NERA 40%													$	283,162		283,162
															$	444,115

2019

Summary of financial position and income statements relating to investment in unconsolidated joint ventures

Summary financial information at June 30, 2019

				Hamilton												Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,009,806		$	2,594,393		$	5,833,501		$	89,352		$			$	5,479,383		$	16,288,449		$	85,469,775		$	122,764,659
Cash & Cash Equivalents		371,049			141,625			223,371			271,833			19,616			132,837			166,951			2,443,433			3,770,715
Rent Receivable		246,158			21,570			4,240			—			—			480			22,923			99,756			395,127
Real Estate Tax Escrow		74,605			—			20,314			—			—			27,807			96,530			—			219,256
Prepaid Expenses & Other Assets		286,887			107,376			60,279			1,199			5,189			14,264			213,740			1,216,087			1,905,021
Total Assets	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,913,818		$	—		$	9,394,671		$	—		$	—		$	5,900,093		$	16,817,068		$	124,423,778		$	166,449,428
Accounts Payable & Accrued Expense		121,192			2,811			82,534			18,162			4,048			56,897			232,031			799,246			1,316,921
Advance Rental Pmts& Security Deposits		311,817			—			322,013			6,305			101			129,339			441,388			3,224,176			4,435,139
Total Liabilities		10,346,827			2,811			9,799,218			24,467			4,149			6,086,329			17,490,487			128,447,200			172,201,488
Partners’ Capital		(2,358,322)			2,862,153			(3,657,513)			337,917			20,656			(431,558)			(701,894)			(39,218,149)			(43,146,710)
Total Liabilities and Capital	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,431,077		$	—		$	168,959		$	10,327		$	—		$	—		$	—			1,610,362
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,179,161)		$	—		$	(1,828,757)		$	—		$	—		$	(215,779)		$	(350,947)		$	(15,687,260)			(19,261,903)
Total Investment in Unconsolidated Joint Ventures (Net)																									$	(17,651,541)
Total units/condominiums
Apartments		48			—			40			175			48			42			148			409			910
Commercial		1			1			—			1			—			—			—			—			3
Total		49			1			40			176			48			42			148			409			913
Units to be retained		49			1			40			1			—			42			148			409			690
Units to be sold		—			—			—			175			48			—			—			—			223
Units sold through August 1, 2019		—			—			—			171			44			—			—			—			215
Unsold units		—			—			—			4			4			—			—			—			8
Unsold units with deposits for future sale as of August 1, 2019		—			—			—			1			2			—			—			—			3

Financial information for the six months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	910,111	$	101,241	$	803,093	$	47,061	$	3,629	$	556,069	$	1,688,003	$	8,060,966	$	12,170,173
Laundry and Sundry Income		6,870		—		584		—		—		2,135		20,080		48,720		78,389
		916,981		101,241		803,677		47,061		3,629		558,204		1,708,083		8,109,686		12,248,562
Expenses
Administrative		15,255		9,674		10,043		4,402		4,214		5,750		34,912		95,917		180,167
Depreciation and Amortization		239,432		10,149		172,453		6,391		5,420		177,501		519,106		1,807,214		2,937,666
Management Fees		34,227		4,320		30,443		1,899		145		22,299		65,003		168,653		326,989
Operating		37,045		8		40,524		862		—		51,579		191,817		599,340		921,175
Renting		8,517		—		11,993		—		—		2,574		33,490		54,549		111,123
Repairs and Maintenance		64,670		3,180		42,277		28,399		10,266		82,321		317,086		563,942		1,112,141
Taxes and Insurance		123,306		30,860		75,609		14,445		5,206		64,769		207,339		1,035,769		1,557,303
		522,452		58,191		383,342		56,398		25,251		406,793		1,368,753		4,325,384		7,146,564
Income Before Other Income		394,529		43,050		420,335		(9,337)		(21,622)		151,411		339,330		3,784,302		5,101,998
Other Income (Loss)
Interest Expense		(243,020)		—		(189,082)		—		(6)		(116,605)		(380,539)		(2,537,735)		(3,466,987)
Gain on Sale of Real Estate		—		—		—		306,075		432,908		—		—		—		738,983
		(243,020)		—		(189,082)		306,075		432,902		(116,605)		(380,539)		(2,537,735)		(2,728,004)
Net Income (Loss)	$	151,509	$	43,050	$	231,253	$	296,738	$	411,280	$	34,806	$	(41,209)	$	1,246,567	$	2,373,994
Net Income (Loss)—NERA 50%	$	75,755	$	21,525	$	115,627	$	148,369	$	205,641	$	17,403	$	(20,605)				563,715
Net Income (Loss)—NERA 40%															$	498,630		498,630
																	$	1,062,345

Financial information for the three months ended June 30, 2019

			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	450,538	$	25,951	$	417,850	$	23,466	$	—	$	281,232	$	865,335	$	4,032,707	$	6,097,079
Laundry and Sundry Income		3,865		—		(805)		—		—		228		10,018		24,695		38,001
		454,403		25,951		417,045		23,466		—		281,460		875,353		4,057,402		6,135,080
Expenses
Administrative		9,876		7,582		4,653		2,708		841		2,034		17,065		40,385		85,144
Depreciation and Amortization		119,887		5,075		86,226		3,195		—		88,906		260,668		907,113		1,471,070
Management Fees		17,021		2,160		16,387		934		—		11,232		33,135		82,504		163,373
Operating		15,594		—		17,921		88		37		27,824		84,527		217,696		363,687
Renting		5,187		—		8,473		—		—		542		17,378		34,886		66,466
Repairs and Maintenance		26,786		3,180		23,810		20,359		—		45,649		192,894		307,357		620,035
Taxes and Insurance		61,476		15,183		35,369		7,096		300		32,518		102,907		517,043		771,892
		255,827		33,180		192,839		34,380		1,178		208,705		708,574		2,106,984		3,541,667
Income Before Other Income		198,576		(7,229)		224,206		(10,914)		(1,178)		72,755		166,779		1,950,418		2,593,413
Other Income (Loss)
Interest Expense		(122,015)		—		(94,834)		—		—		(58,613)		(192,271)		(1,267,633)		(1,735,366)
Interest Income		—		—		—		305,320		—		—		—		—		305,320
		(122,015)		—		(94,834)		305,320		—		(58,613)		(192,271)		(1,267,633)		(1,430,046)
Net Income (Loss)	$	76,561	$	(7,229)	$	129,372	$	294,406	$	(1,178)	$	14,142	$	(25,492)	$	682,784	$	1,163,367
Net Income (Loss)—NERA 50%	$	38,281	$	(3,614)	$	64,686	$	147,203	$	(589)	$	7,071	$	(12,746)				240,292
Net Income (Loss)—NERA 40%															$	273,114		273,114
																	$	513,406

XML

SIGNIFICANT ACCOUNTING POLICIES (Business) (Details)	Jun. 30, 2020 ft² item property	Jun. 30, 2019 USD ($)
Residential and mixed-use properties
Line of Business
Number of Real Estate Properties	25
Number of units	2,892
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of Real Estate Properties	29
Wholly owned properties | Residential buildings
Line of Business
Number of Real Estate Properties	21
Number of units	2,892
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	7
Number of units	688
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	865	913
Investment Properties | Minimum
Line of Business
Ownership interest (as a percent)	40.00%
Investment Properties | Maximum
Line of Business
Ownership interest (as a percent)	50.00%
Investment Properties | Residential buildings
Line of Business
Number of units	862	910
Investment Properties | Commercial
Line of Business
Number of units	3	3
Investment Properties | Partially owned properties | Residential and mixed-use properties
Line of Business
Number of units | property	688

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)		6 Months Ended
	Jan. 03, 2012	Jun. 30, 2020 USD ($) item shares	Jun. 30, 2019 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2019 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		$ 120,000	$ 225,000
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
Single tenants		5
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets		$ 15,636,000				$ 7,407,000
Advertising Expense
Advertising expense		$ 145,803	$ 141,975
Interest Capitalized
Capitalized interest				$ 0	$ 0
Minimum
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)		0.0001%
Maximum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)		0.0003%
Less Than Wholly Owned Subsidiaries [Member] | Minimum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		99.67%
Less Than Wholly Owned Subsidiaries [Member] | Maximum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		100.00%
Investment Properties
Principles of Consolidation
Number of limited liability companies/partnerships | item		7
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, 2020 USD ($) item property	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Rental properties
Total fixed assets	$ 400,048,762	$ 398,554,000
Less: Accumulated depreciation	(128,631,361)	(120,190,012)
Total fixed assets, net	271,417,401	278,363,988
Land, improvements and parking lots
Rental properties
Total fixed assets	$ 86,864,868	86,693,759
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	$ 253,113,482	252,896,183
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	$ 17,633,302	17,376,841
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	$ 11,317,057	10,976,972
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	$ 573,389	573,389
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	$ 709,210	709,210
Laundry equipment | Minimum
Rental properties
Useful Life	5 years
Laundry equipment | Maximum
Rental properties
Useful Life	7 years
Elevators
Rental properties
Total fixed assets	$ 1,885,265	1,885,265
Elevators | Minimum
Rental properties
Useful Life	20 years
Elevators | Maximum
Rental properties
Useful Life	40 years
Swimming pools
Rental properties
Total fixed assets	$ 1,092,194	1,092,194
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets	$ 17,574,649	17,391,731
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	30 years
Motor vehicles
Rental properties
Total fixed assets	$ 211,660	178,847
Motor vehicles | Maximum
Rental properties
Useful Life	5 years
Fences
Rental properties
Total fixed assets	$ 46,872	38,482
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets	$ 8,520,979	8,235,292
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	$ 505,835	$ 505,835
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	29
Investment Properties
RENTAL PROPERTIES
Number of units	865		913
Investment Properties | Minimum
RENTAL PROPERTIES
Ownership interest (as a percent)	40.00%
Investment Properties | Maximum
RENTAL PROPERTIES
Ownership interest (as a percent)	50.00%
Residential and mixed-use properties
RENTAL PROPERTIES
Number of units | item	2,892
Number of properties | item	25
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units | item	688
Number of properties | item	7
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	688
Condominium
RENTAL PROPERTIES
Number of units | item	19
Condominium | Wholly owned properties
RENTAL PROPERTIES
Number of units | item	19
Number of properties | item	1

XML

RENTAL PROPERTIES (Mill Street) (Details)	Dec. 20, 2019 USD ($) item
Maximum
RENTAL PROPERTIES
Loan amount	$ 35,000,000
Mill Street Gardens Residential Apartments Woburn Massachusetts
RENTAL PROPERTIES
Number of units | item	181
Purchase price of real estate properties	$ 59,550,000
Closing costs associated with financing	237,000
Line of credit	18,000,000
Cash from reserves	10,550,000
Loan amount	31,000,000
Purchase price allocated to the value of the in-place leases	1,282,000
Purchase price allocated to the value of the tenant relationships	$ 136,000
Amortization period of value of the in-place leases	12 months
Amortization period of value of the tenant relationships	36 months
Mill Street Gardens Residential Apartments Woburn Massachusetts | Initial Advance
RENTAL PROPERTIES
Loan amount	$ 31,000,000
Interest rate (as a percent)	3.586%
Mill Street Gardens Residential Apartments Woburn Massachusetts | Subsequent Advance
RENTAL PROPERTIES
Loan amount	$ 4,000,000
Interest rate (as a percent)	3.50%

XML

RENTAL PROPERTIES (Captain Parker) (Details)	Jun. 30, 2020 USD ($)
RENTAL PROPERTIES
Loan balance	$ 285,867,000

XML

RELATED PARTY TRANSACTIONS (Details)	3 Months Ended		6 Months Ended			24 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) item	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 20, 2019 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			$ 1,265,000	$ 1,188,000
Management fee	$ 615,541	$ 597,197	1,264,534	1,187,806
Repairs and maintenance	2,049,174	2,287,313	4,135,392	4,231,544
Administrative expense	512,195	626,180	1,096,853	1,238,938
Employer contributions in 401K plan			$ 22,000
Number of limited partnerships and limited liability companies in which the entity has invested | item			7
Interest expense	$ 3,423,583	$ 3,133,439	$ 6,873,908	6,133,728
Maximum
RELATED PARTY TRANSACTIONS
Loan amount							$ 35,000,000
Investment Properties
RELATED PARTY TRANSACTIONS
Number of limited partnerships and limited liability companies in which the entity has invested | item			7
Investment Properties | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	40.00%		40.00%
Investment Properties | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	50.00%		50.00%
Hamilton Company/Management Company
RELATED PARTY TRANSACTIONS
Number of employees having ownership interest in the investment properties | item			5
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			2.00%
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	47.60%		47.60%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	59.00%		59.00%
General Partner or Management Company [Member]
RELATED PARTY TRANSACTIONS
Repairs and maintenance			$ 102,000
Administrative expense			126,000
Expenses for construction, architectural services and supervision of capital projects			305,000
Costs related to professional services			533,000	593,000
Management Company [Member]
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers			1,738,000	1,668,000
Employer contributions in 401K plan			$ 22,000	18,000
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			5
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			$ 321,000
Repairs and maintenance			12,000
Administrative expense			10,000
Construction, architectural services and supervision of capital projects			235,000
Amount paid to related party			$ 578,000
Residential and mixed-use properties | Partially owned properties | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	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%

XML

PREPAID EXPENSES and OTHER ASSETS (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
PREPAID EXPENSES and OTHER ASSETS
Security deposits	$ 2,906,000	$ 2,936,000
Escrow deposits to fund future capital improvements	769,000	501,000
Deposits and escrows held for acquisitions	437,502	446,781
Intangible assets, net of accumulated amortization	715,000	1,382,000
Accumulated amortization on intangible assets	845,000	178,000
Financing fees, net	$ 15,000	$ 36,000

XML

MORTGAGE NOTES PAYABLE (Mortgages Payable) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
MORTGAGE NOTES PAYABLE
Effective interest rate (as a percent)	3.98%
Financing fees, net	$ 15,000	$ 36,000
Accumulated amortization on financing and leasing fees	114,000	93,000
Annual maturities of mortgage debt
2021-current maturities	2,357,000
2022	2,542,000
2023	79,930,000
2024	25,419,000
2025	11,027,000
Thereafter	164,592,000
Total	285,867,000
Less: unamortized deferred financing costs	(1,465,000)
Secured Debt	284,402,031	281,771,246
Mortgages payable
MORTGAGE NOTES PAYABLE
Amount of monthly installments including principal	$ 1,257,000
Weighted average interest rate (as a percent)	4.42%
Effective interest rate (as a percent)	4.51%
Financing fees, net	$ 1,465,000	1,449,000
Accumulated amortization on financing and leasing fees	$ 1,444,000	$ 1,411,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	3.53%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	5.66%

XML

MORTGAGE NOTES PAYABLE (Mortgage by property) (Details)					6 Months Ended
	Mar. 31, 2020 USD ($)	Dec. 21, 2019	Dec. 20, 2019 USD ($) item	May 31, 2019 USD ($)	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Aug. 31, 2014	Dec. 31, 2005	Mar. 07, 2005 item
MORTGAGE NOTES PAYABLE
Repayment of loan					$ 1,000,000	$ 2,000,000
Loan balance					$ 285,867,000
Residences at Captain Parkers LLC Residential Apartments Lexington, Massachusetts
MORTGAGE NOTES PAYABLE
Loan amount				$ 20,750,000
Interest rate (as a percent)				4.05%
Loan balance				$ 20,071,000
Mortgage prepayment penalties				$ 202,000
57 Mill Street
MORTGAGE NOTES PAYABLE
Number of units | item			181
Loan amount			$ 31,000,000
Purchase price of real estate properties			59,550,000
Cash from reserves			10,550,000
Line of credit			18,000,000
Closing costs associated with financing			237,000
Purchase price allocated to the value of the in-place leases			1,282,000
Purchase price allocated to the value of the tenant relationships			$ 136,000
Amortization period of value of the in-place leases			12 months
Amortization period of value of the tenant relationships		36 months
Hamilton Essex 81
MORTGAGE NOTES PAYABLE
Number of units					49	49			48
Brookside Associates LLC Residential Apartments Woburn, Massachusetts
MORTGAGE NOTES PAYABLE
Loan amount	$ 6,175,000
Repayment of loan	2,390,000
Closing Costs	$ 136,000
Interest rate (as a percent)	3.53%
Initial Advance | 57 Mill Street
MORTGAGE NOTES PAYABLE
Loan amount			$ 31,000,000
Interest rate (as a percent)		3.586%
Subsequent Advance | 57 Mill Street
MORTGAGE NOTES PAYABLE
Loan amount			4,000,000
Interest rate (as a percent)		3.50%
Minimum | 57 Mill Street
MORTGAGE NOTES PAYABLE
Loan amount			35,000,000
Maximum
MORTGAGE NOTES PAYABLE
Loan amount			$ 35,000,000
Mortgages payable | Hamilton on Main Apartments, LLC
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)							4.34%	5.18%
Amortization period of debt								30 years
Debt Instrument, Amortization Term								30 years
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					3.53%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					5.66%

XML

MORTGAGE NOTES PAYABLE (Line of Credit) (Details)					1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 22, 2020 USD ($)	Dec. 20, 2019 USD ($)	Sep. 30, 2015	Jul. 31, 2014 USD ($) item	Aug. 31, 2014	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2005	Dec. 19, 2019 USD ($)	May 31, 2019 USD ($)	Mar. 07, 2005 item
Line of Credit
Interest expense						$ 3,423,583	$ 3,133,439	$ 6,873,908	$ 6,133,728
Line Of Credit Facility Unused Capacity Commitment Fee								5,000
Hamilton Essex 81
Line of Credit
Number of properties in which borrowing amount collateralized | item													1
Residences at Captain Parkers LLC Residential Apartments Lexington, Massachusetts
Line of Credit
Loan amount												$ 20,750,000
Minimum
Line of Credit
Tangible net worth						150,000,000		$ 150,000,000
Operating income to indebtedness ratio								9.50%
Debt service coverage ratio								1.6
Maximum
Line of Credit
Loan amount		$ 35,000,000
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
Variable interest rate spread			2.18%
Line of Credit
Line of Credit
Maximum borrowings				$ 25,000,000
Term of debt				3 years
Loan amount											$ 20,000,000
Payment on line of credit	$ 1,000,000	$ 2,000,000
Amount of refinancing costs						128,000		128,000
Credit line balance						$ 17,000,000		$ 17,000,000
Number of properties in which borrowing amount collateralized | item				23
Line of Credit | Federal Funds Rate
Line of Credit
Variable interest rate spread				0.50%
Line of Credit | LIBOR
Line of Credit
Additional applicable margin rate				2.50%
Variable interest rate spread				1.00%
Line of Credit | Minimum
Line of Credit
Pledged interest ownership percentage								49.00%
Commitment fee for unused amount (as a percent)				0.15%
Line of Credit | Maximum
Line of Credit
Pledged interest ownership percentage								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, 2020 USD ($)
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 2,138,000
Security deposits	$ 2,906,000

XML

PARTNERS' CAPITAL (Details)		1 Months Ended		6 Months Ended
	Jan. 03, 2012	Apr. 30, 2020 $ / item	Jan. 31, 2020 $ / item	Jun. 30, 2020 item $ / item	Jun. 30, 2019 $ / item	Dec. 31, 2019 $ / item	Sep. 30, 2019 $ / item	Mar. 31, 2019 $ / item	Aug. 20, 2007
Depositary receipts exchange ratio for Class A units | item				30
Quarterly distribution per unit approved (in dollars per unit)		9.60	9.60
Quarterly distributions per depositary receipt (in dollars per receipt)		0.32	0.32		0.32	0.32	0.32	0.32
Quarterly distribution per unit (in dollars per unit)					9.60	9.60	9.60	9.60
Earnings per depository receipt
Net Income per Depositary Receipt (in dollars per receipt)				0.78	0.89
Distributions per Depositary Receipt (in dollars per share)				0.64	0.64
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%

XML

TREASURY UNITS (Details)				1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended		132 Months Ended	142 Months Ended
	Mar. 10, 2015 shares	Aug. 31, 2007 $ / item shares	Aug. 20, 2007 shares	Sep. 30, 2007 $ / item shares	Aug. 31, 2020 shares	Mar. 31, 2019 $ / item shares	Dec. 31, 2007 $ / item shares	Jun. 30, 2020 USD ($) $ / item shares	Jun. 30, 2019 USD ($) $ / item shares	Dec. 31, 2018 $ / item shares	Jun. 30, 2019 USD ($) $ / item	Mar. 06, 2008 shares
Treasury units								58,469
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		1,428,437		1,428,437			1,428,437		1,428,437	1,428,437
Repurchase price of depository receipts (in dollars per receipt) | $ / item											28.43
Units required to be repurchased (in shares)								222	1,995
Total cost of repurchase | $								$ 394,031	$ 3,305,651		$ 44,718,000
Subsequent event
Number of depository receipts repurchased					0
General Partnership
Treasury units								585
Fixed distribution percentage of unit holders								1.00%
Number of depository receipts repurchased		188		188		188				188
Total cost of repurchase | $								$ 3,941	$ 33,055
Value of units required to be repurchased | $								$ 3,939
Repurchases required (in units)								2.22
Treasury Units
Units required to be repurchased (in shares)								222	1,995
Class A
Treasury units								46,775
Fixed distribution percentage of unit holders								80.00%
Repurchase price of units (in dollars per unit) | $ / item		852.90		852.90		852.90				852.90
Total cost of repurchase | $								$ 315,220	$ 2,644,552
Class B
Treasury units								11,109
Fixed distribution percentage of unit holders								19.00%
Number of depository receipts repurchased		3,572		3,572		3,572				3,572
Total cost of repurchase | $								$ 74,870	$ 628,044
Class B
Value of units required to be repurchased | $								$ 74,839
Class B | General Partnership
Repurchase price of units (in dollars per unit) | $ / item		1,033.00		1,033.00			1,033.00		1,033.00	1,033.00
Repurchases required (in units)								42.18
Treasury Units
Repurchase price of depository receipts (in dollars per receipt) | $ / item								59.14
Units required to be repurchased (in shares)								5,328
Repurchase price of units (in dollars per unit) | $ / item								1,774.20
Total cost of repurchase | $								$ 315,216

XML

RENTAL INCOME (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	95.00%
Maximum period of non-cancelable operating lease	1 year
Percentage of rental income related to commercial properties	5.00%
Minimum future rental income
2021	$ 2,659,000
2022	1,727,000
2023	1,316,000
2024	827,000
2025	242,000
Thereafter	581,000
Commercial Property Leases	7,352,000
Aggregate contingent rentals from continuing operations	$ 251,000	$ 277,000

XML

RENTAL INCOME (Concentration) (Details)	6 Months Ended
	Jun. 30, 2020
Commercial rental income | Major tenant
Concentration Risk
Concentration risk percentage	26.00%

XML

RENTAL INCOME (Commercial Leases) (Details)	6 Months Ended
	Jun. 30, 2020 USD ($) ft² item
RENTAL INCOME
Annual base rent for expiring leases | $	$ 2,835,154
Total square feet for expiring leases | ft²	108,154
Total number of leases expiring | item	49
Percentage of annual base rent for expiring leases	100.00%
2021
RENTAL INCOME
Annual base rent for expiring leases | $	$ 759,320
Total square feet for expiring leases | ft²	39,256
Total number of leases expiring | item	18
Percentage of annual base rent for expiring leases	27.00%
2022
RENTAL INCOME
Annual base rent for expiring leases | $	$ 605,587
Total square feet for expiring leases | ft²	24,225
Total number of leases expiring | item	8
Percentage of annual base rent for expiring leases	21.00%
2023
RENTAL INCOME
Annual base rent for expiring leases | $	$ 421,687
Total square feet for expiring leases | ft²	11,481
Total number of leases expiring | item	7
Percentage of annual base rent for expiring leases	15.00%
2024
RENTAL INCOME
Annual base rent for expiring leases | $	$ 491,548
Total square feet for expiring leases | ft²	14,668
Total number of leases expiring | item	8
Percentage of annual base rent for expiring leases	17.00%
2025
RENTAL INCOME
Annual base rent for expiring leases | $	$ 414,562
Total square feet for expiring leases | ft²	14,674
Total number of leases expiring | item	7
Percentage of annual base rent for expiring leases	15.00%
2030
RENTAL INCOME
Annual base rent for expiring leases | $	$ 142,450
Total square feet for expiring leases | ft²	3,850
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	5.00%

XML

RENTAL INCOME (Rent Receivable) (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
RENTAL INCOME
Allowance for doubtful rent receivable	$ 730,000	$ 240,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	96,000
Deferred rental concession	$ 172,000

XML

CASH FLOW INFORMATION (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOW INFORMATION
Cash paid for interest	$ 6,611,000	$ 5,936,000
Cash paid for state income taxes	81,000	$ 76,000
Non-cash financing activities in connection with acquisition	$ 2,393,000

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Mortgage Notes Payable
Carrying Amount	$ 284,402,031	$ 281,771,246
Estimated Fair Value	305,678,933	290,892,652
Partially owned properties
Mortgage Notes Payable
Carrying Amount	166,357,134	166,404,255
Estimated Fair Value	$ 179,496,478	$ 169,988,236

XML

TAXABLE INCOME AND TAX BASIS (Details)	12 Months Ended
	Dec. 31, 2019 USD ($)
TAXABLE INCOME AND TAX BASIS
Taxable net income	$ 2,039,000
Excess amount of statement income over taxable income	4,508,000
Excess amount of cumulative statement basis over cumulative taxable basis	5,311,000
Excess amount of statement income from joint venture investments over taxable income	$ 1,688,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details)	6 Months Ended
	Jun. 30, 2020 item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested	7
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested	7
Number of partnerships investing in commercial property	3
Hamilton Company/Management Company
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties	5
Management Company [Member]
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties	5
Minimum | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	40.00%
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)	47.60%
Maximum | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	50.00%
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)	59.00%

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Dexter) (Details)			3 Months Ended	6 Months Ended
	May 31, 2018 USD ($)	Oct. 28, 2009 USD ($) item	Sep. 30, 2018 USD ($)	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture				$ 1,453,894		$ 1,430,402
Outstanding amount of mortgage				284,402,031		$ 281,771,246
Distribution to the Partnership				$ 2,338,034	$ 2,352,443
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 15,925,000
Ownership interest (as a percent)		40.00%			40.00%
Number of units		409		409	409
Purchase price of investments		$ 129,500,000
Outstanding amount of mortgage	$ 82,000,000			$ 125,000,000
Distribution to the Partnership	41,200,000
Dexter Park | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Loan amount		$ 89,914,000
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
John Hancock | Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Loan amount	$ 125,000,000
Interest rate (as a percent)	3.99%
Defeasance cost			$ 3,830,000
Defeasance cost (as a percent)			40.00%
General Partnership
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Distribution to the Partnership				$ 23,380	$ 23,524
General Partnership | Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Distribution to the Partnership	$ 16,500,000
General Partnership | John Hancock | Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Defeasance cost			$ 1,532,000
Residential buildings | Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units				409	409

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Bay Apts and Sales) (Details)		1 Months Ended	12 Months Ended
	Mar. 01, 2017 USD ($)	Feb. 28, 2007 USD ($) item	Dec. 31, 2019 USD ($) item	Jun. 30, 2020 USD ($)	Dec. 20, 2019 USD ($)	Jun. 30, 2019 USD ($)	Oct. 03, 2005 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 1,430,402	$ 1,453,894
Outstanding amount of mortgage			$ 281,771,246	$ 284,402,031
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture						$ 10,327	$ 2,500,000
Ownership interest (as a percent)						50.00%	50.00%
Number of units						48	168
Number of units sold | item			3				120
Number of units retained for long-term investment | item		48					48
Term of debt		10 years
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
Capital contributions	$ 2,222,000
Gain on sale of assets			$ 429,000
Unsold units						4
Purchase price of investments							$ 30,875,000
Mortgage amount		$ 4,750,000
Residential buildings | Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units						48
Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount					$ 35,000,000
Mortgages payable | Minimum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)				3.53%
Mortgages payable | Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)				5.66%

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Essex) (Details)					6 Months Ended
	Oct. 12, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 28, 2015 USD ($)	Mar. 07, 2005 USD ($) item	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 20, 2019 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture					$ 1,453,894		$ 1,430,402
Repayment of loan	$ 5,158,000
Distribution to the Partnership					2,338,034	$ 2,352,443
Mortgage Notes Payable					$ 284,402,031		$ 281,771,246
Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount								$ 35,000,000
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
Ownership interest (as a percent)						50.00%
Number of units				48	49	49
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
Investments in joint venture					$ 1,404,887	$ 1,431,077
Ownership interest (as a percent)						50.00%
Number of units					1	1
Capacity of real estate property (in cars per lot) | item				50
Capital contributions			978,193
Residential buildings | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units					48	48
Commercial | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units					1	1
Commercial | Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units					1	1
Mortgages payable | Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)					5.66%
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

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton 1025) (Details)			6 Months Ended
	Jul. 08, 2016 USD ($)	Mar. 02, 2005 USD ($) item	Jun. 30, 2020 USD ($) property	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 1,453,894	$ 1,430,402
Outstanding amount of mortgage			284,402,031	$ 281,771,246
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 2,352,000	$ 49,008		$ 168,959
Ownership interest (as a percent)		50.00%			50.00%
Number of units		176	176		176
Number of units sold		127	306,000
Unsold units					4
Number of units retained for long-term investment		49	(1)		(1)
Capital contributions	$ 2,359,500
Purchase price of investments		$ 23,750,000
Gain on sale of assets			$ 2
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
Residential buildings | Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units			175		175

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Minuteman) (Details)			1 Months Ended			6 Months Ended
	Oct. 13, 2016 USD ($)	Oct. 12, 2016 USD ($)	Jan. 31, 2007 USD ($)	Oct. 31, 2004 USD ($)	Sep. 30, 2004 USD ($) item	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture						$ 1,453,894		$ 1,430,402
Distribution to the Partnership						2,338,034	$ 2,352,443
Amount of mortgage paid off		$ 5,158,000
Outstanding amount of mortgage						$ 284,402,031		$ 281,771,246
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture					$ 5,075,000
Ownership interest (as a percent)					50.00%		50.00%
Number of units					42	42	42
Purchase price of real estate properties					$ 10,100,000
Distribution to the Partnership	$ 385,000			$ 3,775,000
Mortgage amount		$ 6,000,000	$ 5,500,000	$ 8,025,000		$ 6,000,000
Term of debt		15 years	10 years	10 years
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			5 years
Amortization period of debt			30 years
Cash contribution by the entity towards loan			$ 1,250,000
Residential buildings | Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units						42	42

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton on Main) (Details)		1 Months Ended	6 Months Ended		12 Months Ended
	Oct. 12, 2016 USD ($)	Aug. 31, 2014 USD ($)	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Dec. 31, 2005 USD ($) item	Dec. 31, 2019 USD ($)	Aug. 31, 2004 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 1,453,894			$ 1,430,402
Outstanding amount of mortgage			284,402,031			$ 281,771,246
Repayment of loan	$ 5,158,000
Distribution to the Partnership			$ 2,338,034	$ 2,352,443
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture							$ 8,000,000
Ownership interest (as a percent)				50.00%			50.00%
Number of units			148	148			280
Number of units sold | item							137
Purchase price of investments							$ 56,000,000
Residential buildings | Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units			148	148
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

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (345 Franklin) (Details)		1 Months Ended	6 Months Ended
	Oct. 12, 2016 USD ($)	Jun. 30, 2013 USD ($)	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 20, 2019 USD ($)	Nov. 30, 2001 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 1,453,894		$ 1,430,402
Repayment of loan	$ 5,158,000
Distribution to the Partnership			2,338,034	$ 2,352,443
Outstanding amount of mortgage			$ 284,402,031		$ 281,771,246
Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount						$ 35,000,000
Maximum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)			5.66%
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage			$ 9,253,000
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture							$ 1,533,000
Ownership interest (as a percent)				50.00%			50.00%
Number of units			40	40			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
345 Franklin | Residential buildings
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units			40	40

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Balance Sheet) (Details)	Jun. 30, 2020 USD ($) property	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Oct. 28, 2009 USD ($) item	Feb. 28, 2007 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	$ 1,453,894	$ 1,430,402
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (20,129,903)	$ (19,970,089)
NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
NERA 40%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	40.00%
Investment Properties
ASSETS
Rental Properties	$ 118,163,679		$ 122,764,659
Cash & Cash Equivalents	4,483,939		3,770,715
Rent Receivable	735,902		395,127
Real Estate Tax Escrow	181,308		219,256
Prepaid Expenses & Other Assets	2,565,663		1,905,021
Total Assets	126,130,491		129,054,778
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	166,357,134		166,449,428
Accounts Payable and Accrued Expenses	1,360,581		1,316,921
Advance Rental Payments and Security Deposits	3,878,866		4,435,139
Total Liabilities	171,596,581		172,201,488
Partners' Capital	(45,466,090)		(43,146,710)
Total Liabilities and Capital	126,130,491		129,054,778
Investment in Unconsolidated Joint Ventures	1,453,895		1,610,362
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	(20,129,903)		(19,261,903)
Total Investment in Unconsolidated Joint Ventures (Net)	$ (18,676,009)		$ (17,651,541)
Total units/ condominiums
Total	865		913
Units to be retained	690		690
Units to be sold			223
Total number of units sold	175		215
Unsold units			8
Units unsold with deposits for future sale			3
Investment Properties | Residential buildings
Total units/ condominiums
Total	862		910
Investment Properties | Commercial
Total units/ condominiums
Total	3		3
Hamilton Essex 81
ASSETS
Rental Properties	$ 6,866,502		$ 7,009,806
Cash & Cash Equivalents	368,053		371,049
Rent Receivable	343,831		246,158
Real Estate Tax Escrow	62,383		74,605
Prepaid Expenses & Other Assets	308,350		286,887
Total Assets	7,949,119		7,988,505
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,927,607		9,913,818
Accounts Payable and Accrued Expenses	72,016		121,192
Advance Rental Payments and Security Deposits	300,200		311,817
Total Liabilities	10,299,823		10,346,827
Partners' Capital	(2,350,704)		(2,358,322)
Total Liabilities and Capital	7,949,119		$ 7,988,505
Partners' Capital % - NERA			50.00%
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (1,175,352)		$ (1,179,161)
Total units/ condominiums
Total	49		49				48
Units to be retained	49		49
Hamilton Essex 81 | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
Hamilton Essex 81 | Residential buildings
Total units/ condominiums
Total	48		48
Hamilton Essex 81 | Commercial
Total units/ condominiums
Total	1		1
Hamilton Essex Development
ASSETS
Rental Properties	$ 2,591,904		$ 2,594,393
Cash & Cash Equivalents	85,827		141,625
Rent Receivable	43,854		21,570
Prepaid Expenses & Other Assets	89,788		107,376
Total Assets	2,811,373		2,864,964
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	1,599		2,811
Total Liabilities	1,599		2,811
Partners' Capital	2,809,774		2,862,153
Total Liabilities and Capital	2,811,373		$ 2,864,964
Partners' Capital % - NERA			50.00%
Investment in Unconsolidated Joint Ventures	$ 1,404,887		$ 1,431,077
Total units/ condominiums
Total	1		1
Units to be retained	1		1
Hamilton Essex Development | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
Hamilton Essex Development | Commercial
Total units/ condominiums
Total	1		1
345 Franklin
ASSETS
Rental Properties	$ 5,513,615		$ 5,833,501
Cash & Cash Equivalents	243,868		223,371
Rent Receivable	6,827		4,240
Real Estate Tax Escrow	21,487		20,314
Prepaid Expenses & Other Assets	99,498		60,279
Total Assets	5,885,295		6,141,705
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,199,730		9,394,671
Accounts Payable and Accrued Expenses	89,688		82,534
Advance Rental Payments and Security Deposits	308,520		322,013
Total Liabilities	9,597,938		9,799,218
Partners' Capital	(3,712,643)		(3,657,513)
Total Liabilities and Capital	5,885,295		$ 6,141,705
Partners' Capital % - NERA			50.00%								50.00%
Investment in Unconsolidated Joint Ventures											$ 1,533,000
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (1,856,321)		$ (1,828,757)
Total units/ condominiums
Total	40		40								40
Units to be retained	40		40
345 Franklin | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
345 Franklin | Residential buildings
Total units/ condominiums
Total	40		40
Hamilton 1025
ASSETS
Rental Properties	$ 86,451		$ 89,352
Cash & Cash Equivalents	20,661		271,833
Prepaid Expenses & Other Assets	2,341		1,199
Total Assets	109,453		362,384
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	11,438		18,162
Advance Rental Payments and Security Deposits			6,305
Total Liabilities	11,438		24,467
Partners' Capital	98,015		337,917
Total Liabilities and Capital	109,453		$ 362,384
Partners' Capital % - NERA			50.00%					50.00%
Investment in Unconsolidated Joint Ventures	$ 49,008		$ 168,959					$ 2,352,000
Total units/ condominiums
Total	176		176					176
Units to be retained	1		1					(49)
Units to be sold			175
Total number of units sold	175		171
Unsold units			4
Units unsold with deposits for future sale			1
Hamilton 1025 | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
Hamilton 1025 | Residential buildings
Total units/ condominiums
Total	175		175
Hamilton 1025 | Commercial
Total units/ condominiums
Total	1		1
Hamilton Bay Apts
ASSETS
Cash & Cash Equivalents			$ 19,616
Prepaid Expenses & Other Assets			5,189
Total Assets			24,805
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses			4,048
Advance Rental Payments and Security Deposits			101
Total Liabilities			4,149
Partners' Capital			20,656
Total Liabilities and Capital			$ 24,805
Partners' Capital % - NERA			50.00%			50.00%
Investment in Unconsolidated Joint Ventures			$ 10,327			$ 2,500,000
Total units/ condominiums
Total			48			168
Units to be retained | item					(48)	(48)
Units to be sold			48
Total number of units sold			44
Unsold units			4
Units unsold with deposits for future sale			2
Hamilton Bay Apts | Residential buildings
Total units/ condominiums
Total			48
Hamilton Minuteman
ASSETS
Rental Properties	$ 5,160,011		$ 5,479,383
Cash & Cash Equivalents	162,471		132,837
Rent Receivable	1,407		480
Real Estate Tax Escrow	25,341		27,807
Prepaid Expenses & Other Assets	33,062		14,264
Total Assets	5,382,292		5,654,771
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	5,908,276		5,900,093
Accounts Payable and Accrued Expenses	64,549		56,897
Advance Rental Payments and Security Deposits	147,506		129,339
Total Liabilities	6,120,331		6,086,329
Partners' Capital	(738,039)		(431,558)
Total Liabilities and Capital	5,382,292		$ 5,654,771
Partners' Capital % - NERA			50.00%						50.00%
Investment in Unconsolidated Joint Ventures									$ 5,075,000
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (369,020)		$ (215,779)
Total units/ condominiums
Total	42		42						42
Units to be retained	42		42
Hamilton Minuteman | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
Hamilton Minuteman | Residential buildings
Total units/ condominiums
Total	42		42
Hamilton on Main Apts
ASSETS
Rental Properties	$ 15,570,896		$ 16,288,449
Cash & Cash Equivalents	553,842		166,951
Rent Receivable	56,713		22,923
Real Estate Tax Escrow	72,097		96,530
Prepaid Expenses & Other Assets	175,465		213,740
Total Assets	16,429,013		16,788,593
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	16,833,120		16,817,068
Accounts Payable and Accrued Expenses	157,567		232,031
Advance Rental Payments and Security Deposits	440,458		441,388
Total Liabilities	17,431,145		17,490,487
Partners' Capital	(1,002,132)		(701,894)
Total Liabilities and Capital	16,429,013		$ 16,788,593
Partners' Capital % - NERA			50.00%							50.00%
Investment in Unconsolidated Joint Ventures										$ 8,000,000
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (501,066)		$ (350,947)
Total units/ condominiums
Total	148		148							280
Units to be retained	148		148
Hamilton on Main Apts | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	50.00%
Hamilton on Main Apts | Residential buildings
Total units/ condominiums
Total	148		148
Dexter Park
ASSETS
Rental Properties	$ 82,374,300		$ 85,469,775
Cash & Cash Equivalents	3,049,217		2,443,433
Rent Receivable	283,270		99,756
Prepaid Expenses & Other Assets	1,857,159		1,216,087
Total Assets	87,563,946		89,229,051
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	124,488,401		124,423,778
Accounts Payable and Accrued Expenses	963,724		799,246
Advance Rental Payments and Security Deposits	2,682,182		3,224,176
Total Liabilities	128,134,307		128,447,200
Partners' Capital	(40,570,361)		(39,218,149)
Total Liabilities and Capital	87,563,946		$ 89,229,051
Partners' Capital % - NERA			40.00%	40.00%
Investment in Unconsolidated Joint Ventures				$ 15,925,000
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (16,228,145)		$ (15,687,260)
Total units/ condominiums
Total	409		409	409
Units to be retained	409		409
Dexter Park | NERA 50%
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA	40.00%
Dexter Park | Residential buildings
Total units/ condominiums
Total	409		409

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Income) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Oct. 28, 2009	Oct. 03, 2005	Mar. 02, 2005	Sep. 30, 2004	Aug. 31, 2004	Nov. 30, 2001
NERA 50%
Other Income (loss)
Ownership interest (as a percent)	50.00%		50.00%
NERA 40%
Other Income (loss)
Ownership interest (as a percent)	40.00%		40.00%
Investment Properties
Revenues
Rental income	$ 6,038,075	$ 6,097,079	$ 12,389,532	$ 12,170,173
Laundry and Sundry Income	32,667	38,001	70,997	78,389
Total Revenues	6,070,742	6,135,080	12,460,529	12,248,562
Expenses
Administrative	79,862	85,144	169,962	180,167
Depreciation and amortization	1,484,331	1,471,070	2,961,219	2,937,666
Management Fees	150,347	163,373	321,175	326,989
Operating	368,244	363,687	833,252	921,175
Renting	26,161	66,466	65,212	111,123
Repairs and Maintenance	416,490	620,035	897,819	1,112,141
Taxes and Insurance	832,830	771,892	1,691,854	1,557,303
Total Expenses	3,358,265	3,541,667	6,940,493	7,146,564
Income Before Other Income	2,712,477	2,593,413	5,520,036	5,101,998
Other Income (loss)
Interest Expense	(1,682,669)	(1,735,366)	(3,396,574)	(3,466,987)
Interest Income		305,320
Gain on Sale of Real Estate				738,983
Total Other Income (Loss)	(1,682,669)	(1,430,046)	(3,396,574)	(2,728,004)
Net Income (Loss)	1,029,808	1,163,367	2,123,462	2,373,994
Proportionate share of net income (loss)	444,115	513,406	918,678	1,062,345
Investment Properties | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	160,953	240,292	346,476	563,715
Investment Properties | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	283,162	273,114	572,202	498,630
Hamilton Essex 81
Revenues
Rental income	380,708	450,538	820,088	910,111
Laundry and Sundry Income	3,298	3,865	6,683	6,870
Total Revenues	384,006	454,403	826,771	916,981
Expenses
Administrative	5,293	9,876	11,480	15,255
Depreciation and amortization	121,927	119,887	243,569	239,432
Management Fees	10,316	17,021	28,052	34,227
Operating	20,776	15,594	46,299	37,045
Renting	629	5,187	3,404	8,517
Repairs and Maintenance	40,200	26,786	67,209	64,670
Taxes and Insurance	64,724	61,476	129,401	123,306
Total Expenses	263,865	255,827	529,414	522,452
Income Before Other Income	120,141	198,576	297,357	394,529
Other Income (loss)
Interest Expense	(71,358)	(122,015)	(172,091)	(243,020)
Total Other Income (Loss)	(71,358)	(122,015)	(172,091)	(243,020)
Net Income (Loss)	48,783	$ 76,561	125,266	$ 151,509
Ownership interest (as a percent)		50.00%		50.00%
Hamilton Essex 81 | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ 24,392	$ 38,281	$ 62,632	$ 75,755
Ownership interest (as a percent)	50.00%		50.00%
Hamilton Essex Development
Revenues
Rental income	$ 5,391	25,951	$ 65,862	101,241
Total Revenues	5,391	25,951	65,862	101,241
Expenses
Administrative	1,550	7,582	2,200	9,674
Depreciation and amortization	5,075	5,075	10,149	10,149
Management Fees		2,160	2,203	4,320
Operating				8
Repairs and Maintenance	3,046	3,180	3,046	3,180
Taxes and Insurance	15,238	15,183	30,457	30,860
Total Expenses	24,909	33,180	48,055	58,191
Income Before Other Income	(19,518)	(7,229)	17,807	43,050
Other Income (loss)
Net Income (Loss)	(19,518)	$ (7,229)	17,807	$ 43,050
Ownership interest (as a percent)		50.00%		50.00%
Hamilton Essex Development | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ (9,758)	$ (3,614)	$ 8,903	$ 21,525
Ownership interest (as a percent)	50.00%		50.00%
345 Franklin
Revenues
Rental income	$ 419,342	417,850	$ 847,492	803,093
Laundry and Sundry Income	171	(805)	625	584
Total Revenues	419,513	417,045	848,117	803,677
Expenses
Administrative	8,572	4,653	16,328	10,043
Depreciation and amortization	84,541	86,226	169,036	172,453
Management Fees	15,829	16,387	32,296	30,443
Operating	15,776	17,921	28,764	40,524
Renting	929	8,473	9,682	11,993
Repairs and Maintenance	21,797	23,810	43,375	42,277
Taxes and Insurance	39,808	35,369	79,714	75,609
Total Expenses	187,252	192,839	379,195	383,342
Income Before Other Income	232,261	224,206	468,922	420,335
Other Income (loss)
Interest Expense	(92,983)	(94,834)	(186,408)	(189,082)
Total Other Income (Loss)	(92,983)	(94,834)	(186,408)	(189,082)
Net Income (Loss)	139,278	$ 129,372	282,514	$ 231,253
Ownership interest (as a percent)		50.00%		50.00%						50.00%
345 Franklin | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ 69,639	$ 64,686	$ 141,257	$ 115,627
Ownership interest (as a percent)	50.00%		50.00%
Hamilton 1025
Revenues
Rental income	$ 20,558	23,466	$ 41,117	47,061
Total Revenues	20,558	23,466	41,117	47,061
Expenses
Administrative	931	2,708	11,056	4,402
Depreciation and amortization	816	3,195	1,632	6,391
Management Fees	822	934	1,645	1,899
Operating	51	88	96	862
Repairs and Maintenance		20,359		28,399
Taxes and Insurance	4,492	7,096	8,680	14,445
Total Expenses	7,112	34,380	23,109	56,398
Income Before Other Income	13,446	(10,914)	18,008	(9,337)
Other Income (loss)
Interest Income		305,320
Gain on Sale of Real Estate				306,075
Total Other Income (Loss)		305,320		306,075
Net Income (Loss)	13,446	$ 294,406	18,008	$ 296,738
Ownership interest (as a percent)		50.00%		50.00%			50.00%
Hamilton 1025 | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ 6,723	$ 147,203	$ 9,004	$ 148,369
Ownership interest (as a percent)	50.00%		50.00%
Hamilton Bay Apts
Revenues
Rental income				3,629
Total Revenues				3,629
Expenses
Administrative		841		4,214
Depreciation and amortization				5,420
Management Fees				145
Operating		37
Repairs and Maintenance				10,266
Taxes and Insurance		300		5,206
Total Expenses		1,178		25,251
Income Before Other Income		(1,178)		(21,622)
Other Income (loss)
Interest Expense				(6)
Gain on Sale of Real Estate				432,908
Total Other Income (Loss)				432,902
Net Income (Loss)		$ (1,178)		$ 411,280
Ownership interest (as a percent)		50.00%		50.00%		50.00%
Hamilton Bay Apts | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)		$ (589)		$ 205,641
Hamilton Minuteman
Revenues
Rental income	$ 290,517	281,232	$ 581,210	556,069
Laundry and Sundry Income	626	228	626	2,135
Total Revenues	291,143	281,460	581,836	558,204
Expenses
Administrative	4,168	2,034	6,650	5,750
Depreciation and amortization	86,954	88,906	173,780	177,501
Management Fees	11,472	11,232	23,004	22,299
Operating	28,428	27,824	50,654	51,579
Renting	2,750	542	5,750	2,574
Repairs and Maintenance	28,056	45,649	38,950	82,321
Taxes and Insurance	36,125	32,518	72,176	64,769
Total Expenses	197,953	208,705	370,964	406,793
Income Before Other Income	93,190	72,755	210,872	151,411
Other Income (loss)
Interest Expense	(59,242)	(58,613)	(118,502)	(116,605)
Total Other Income (Loss)	(59,242)	(58,613)	(118,502)	(116,605)
Net Income (Loss)	33,948	$ 14,142	92,370	$ 34,806
Ownership interest (as a percent)		50.00%		50.00%				50.00%
Hamilton Minuteman | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ 16,974	$ 7,071	$ 46,185	$ 17,403
Ownership interest (as a percent)	50.00%		50.00%
Hamilton on Main Apts
Revenues
Rental income	$ 897,613	865,335	$ 1,803,314	1,688,003
Laundry and Sundry Income	8,606	10,018	17,355	20,080
Total Revenues	906,219	875,353	1,820,669	1,708,083
Expenses
Administrative	13,627	17,065	29,475	34,912
Depreciation and amortization	263,086	260,668	524,133	519,106
Management Fees	32,745	33,135	67,729	65,003
Operating	83,750	84,527	177,595	191,817
Renting	7,773	17,378	15,493	33,490
Repairs and Maintenance	99,155	192,894	233,991	317,086
Taxes and Insurance	109,712	102,907	232,474	207,339
Total Expenses	609,848	708,574	1,280,890	1,368,753
Income Before Other Income	296,371	166,779	539,779	339,330
Other Income (loss)
Interest Expense	(190,404)	(192,271)	(382,787)	(380,539)
Total Other Income (Loss)	(190,404)	(192,271)	(382,787)	(380,539)
Net Income (Loss)	105,967	$ (25,492)	156,992	$ (41,209)
Ownership interest (as a percent)		50.00%		50.00%					50.00%
Hamilton on Main Apts | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	$ 52,984	$ (12,746)	$ 78,495	$ (20,605)
Ownership interest (as a percent)	50.00%		50.00%
Dexter Park
Revenues
Rental income	$ 4,023,946	4,032,707	$ 8,230,449	8,060,966
Laundry and Sundry Income	19,966	24,695	45,708	48,720
Total Revenues	4,043,912	4,057,402	8,276,157	8,109,686
Expenses
Administrative	45,721	40,385	92,773	95,917
Depreciation and amortization	921,932	907,113	1,838,920	1,807,214
Management Fees	79,163	82,504	166,246	168,653
Operating	219,463	217,696	529,844	599,340
Renting	14,080	34,886	30,883	54,549
Repairs and Maintenance	224,236	307,357	511,248	563,942
Taxes and Insurance	562,731	517,043	1,138,952	1,035,769
Total Expenses	2,067,326	2,106,984	4,308,866	4,325,384
Income Before Other Income	1,976,586	1,950,418	3,967,291	3,784,302
Other Income (loss)
Interest Expense	(1,268,682)	(1,267,633)	(2,536,786)	(2,537,735)
Total Other Income (Loss)	(1,268,682)	(1,267,633)	(2,536,786)	(2,537,735)
Net Income (Loss)	$ 707,904	$ 682,784	$ 1,430,505	$ 1,246,567
Ownership interest (as a percent)		40.00%		40.00%	40.00%
Dexter Park | NERA 50%
Other Income (loss)
Ownership interest (as a percent)	40.00%		40.00%
Dexter Park | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	$ 283,162	$ 273,114	$ 572,202	$ 498,630

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Mortgage Maturities) (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Less: unamortized deferred financing costs	$ (1,465,000)
Weighted average interest rate (as a percent)	3.91%
Effective interest rate (as a percent)	3.98%
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2019	$ 209,541
3/31/2020	217,796
3/31/2021	226,376
3/31/2022	235,293
3/31/2023	17,144,563
Thereafter	149,119,429
Total	167,152,998
Less: unamortized deferred financing costs	(795,864)
Debt maturities net of unamortized deferred financing costs	166,357,134	$ 166,449,428
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	10,000,000
Total	10,000,000
Less: unamortized deferred financing costs	(72,393)
Debt maturities net of unamortized deferred financing costs	9,927,607	9,913,818
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2019	209,541
3/31/2020	217,796
3/31/2021	226,376
3/31/2022	235,293
3/31/2023	244,563
Thereafter	8,119,429
Total	9,252,998
Less: unamortized deferred financing costs	(53,268)
Debt maturities net of unamortized deferred financing costs	9,199,730	9,394,671
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	6,000,000
Total	6,000,000
Less: unamortized deferred financing costs	(91,724)
Debt maturities net of unamortized deferred financing costs	5,908,276	5,900,093
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2023	16,900,000
Total	16,900,000
Less: unamortized deferred financing costs	(66,880)
Debt maturities net of unamortized deferred financing costs	16,833,120	16,817,068
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	125,000,000
Total	125,000,000
Less: unamortized deferred financing costs	(511,599)
Debt maturities net of unamortized deferred financing costs	$ 124,488,401	$ 124,423,778

XML

EMPLOYEE BENEFIT 401(k) PLANS (Details)	6 Months Ended
	Jun. 30, 2020 USD ($)
EMPLOYEE BENEFTI 401(k) PLANS
Maximum deferral percentage	90.00%
Matching contribution (as a percent)	50.00%
Percent of compensation	6.00%
Employee contribution vesting percentage	100.00%
Years of service required to vest in employer contributions	2 years
Years of service required to vest 100% in employer contributions	6 years
Annual vesting percentage	20.00%
Total plan expense	$ 22,000

XML

SUBSEQUENT EVENTS (Details) - shares		1 Months Ended	2 Months Ended	3 Months Ended	6 Months Ended	132 Months Ended
	Aug. 31, 2007	Sep. 30, 2007	Aug. 31, 2020	Dec. 31, 2007	Jun. 30, 2019	Dec. 31, 2018
Subsequent events
Number of depository receipts repurchased	1,428,437	1,428,437		1,428,437	1,428,437	1,428,437
Subsequent event
Subsequent events
Number of depository receipts repurchased			0