INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

9 Months Ended

Sep. 30, 2023

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 15. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are the Brown Family related entities and five current and former employees of the Management Company. The Brown Family’s ownership

interest was between 47.6% and 59%, with the balance owned by the others. A description of each investment is as follows:

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

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

Hamilton Park used the proceeds of the loan to pay off an outstanding loan of approximately $82,000,000 and distributed approximately $41,200,000 to its owners. The Partnership’s share of the distribution was approximately $16,500,000. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for the investment using the equity method of accounting, although the Partnership has no legal obligation to fund its’ share of any future operating deficiencies as needed. At September 30, 2023, the balance on this mortgage before unamortized deferred financing costs is $125,000,000. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Joint Venture planned to operate the building and initiate development of the parking lot. In June 2007, the Joint Venture separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Joint Venture restructured the mortgages on both parcels at Essex 81. On September 30, 2015, Hamilton Essex 81, LLC obtained a new 10 year mortgage in the amount of $10,000,000, interest only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At September 30, 2023, the balance on this mortgage before unamortized deferred financing costs is $10,000,000. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

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

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was

approximately $123,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. At September 30 2023, the balance on this mortgage before unamortized deferred financing costs is $6,000,000. This investment is referred to as Hamilton Minuteman, LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. The Joint Venture sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only. The Joint Venture paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. At September 30, 2023, the balance of the mortgage before unamortized deferred finance is $16,900,000. The investment is referred to as Hamilton on Main LLC.

On August 23, 2023, Hamilton on Main Apartments, LLC (the “Borrower”), a 50% owned joint venture of the Partnership, received notice from KeyBank, as servicer for the lender of a $16,900,000 loan, indicating that the Borrower failed to comply with certain terms of the loan documents pertaining to the transfer of interests in the Borrower that occurred on the occasion of Harold Brown’s death, and that such transfer constitutes an event of default under the loan documents. While the Borrower has disputed that any events of default actually exist, it is working diligently with KeyBank to obtain KeyBank’s consent to the transfer.

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 September 30, 2023, the balance of this mortgage before unamortized deferred financing costs is approximately $8,541,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information at September 30, 2023

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	5,517,486		$	2,583,813		$	4,567,358		$	75,843		$	4,261,249		$	12,742,373		$	73,786,757		$	103,534,879
Cash & Cash Equivalents		1,044,888			73,383			112,129			16,328			404,742			902,251			1,593,551			4,147,272
Rent Receivable		197,549			80,264			3,272			4,526			1,890			22,244			114,086			423,831
Real Estate Tax Escrow		70,897			—			66,029			—			40,477			139,457			—			316,860
Prepaid Expenses & Other Assets		331,025			47,178			94,692			777			54,728			233,231			2,501,688			3,263,319
Total Assets	$	7,161,845		$	2,784,638		$	4,843,480		$	97,474		$	4,763,086		$	14,039,556		$	77,996,082		$	111,686,161
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,972,422		$	—		$	8,509,683		$	—		$	5,934,873		$	16,885,286		$	124,698,426		$	166,000,690
Accounts Payable & Accrued Expense		162,273			2,250			111,162			2,739			103,267			192,429			801,974			1,376,094
Advance Rental Pmts & Security Deposits		354,788			—			277,672			612			183,421			492,006			2,975,056			4,283,555
Total Liabilities		10,489,483			2,250			8,898,517			3,351			6,221,561			17,569,721			128,475,456			171,660,339
Partners’ Capital		(3,327,638)			2,782,388			(4,055,037)			94,123			(1,458,475)			(3,530,165)			(50,479,374)			(59,974,178)
Total Liabilities and Capital	$	7,161,845		$	2,784,638		$	4,843,480		$	97,474		$	4,763,086		$	14,039,556		$	77,996,082		$	111,686,161
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,391,194		$	—		$	47,061		$	—		$	—		$	—			1,438,255
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,663,819)		$	—		$	(2,027,519)		$	—		$	(729,238)		$	(1,765,082)		$	(20,191,749)			(26,377,405)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(24,939,150)
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 November 1, 2023		—			—			—			175			—			—			—			175
Unsold units		—			—			—			—			—			—			—			—

Financial information for the nine months ended September 30, 2023

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,305,180	$	181,413	$	1,265,519	$	73,989	$	977,459	$	2,877,609	$	12,087,700	$	18,768,869
Laundry and Sundry Income		807		—		115		—		—		11,298		92,735		104,955
		1,305,987		181,413		1,265,634		73,989		977,459		2,888,907		12,180,435		18,873,824
Expenses
Administrative		14,957		2,278		23,617		2,600		12,622		59,441		181,971		297,486
Depreciation and Amortization		352,019		8,782		259,744		2,448		253,492		796,968		2,748,175		4,421,628
Management Fees		52,475		7,183		49,489		3,000		39,269		113,643		248,873		513,932
Operating		228,886		—		70,775		218		93,771		329,701		963,365		1,686,716
Renting		55,933		—		34,840		—		5,596		38,553		98,487		233,409
Repairs and Maintenance		140,557		—		127,427		—		77,035		499,894		1,513,141		2,358,054
Taxes and Insurance		211,209		46,119		143,274		13,037		108,611		395,153		1,951,235		2,868,638
		1,056,036		64,362		709,166		21,303		590,396		2,233,353		7,705,247		12,379,863
Income Before Other Income		249,951		117,051		556,468		52,686		387,063		655,554		4,475,188		6,493,961
Other Income (Loss)
Interest Expense		(553,535)		—		(258,949)		—		(177,694)		(593,120)		(3,779,306)		(5,362,604)
		(553,535)		—		(258,949)		—		(177,694)		(593,120)		(3,779,306)		(5,362,604)
Net (Loss) Income	$	(303,584)	$	117,051	$	297,519	$	52,686	$	209,369	$	62,434	$	695,882	$	1,131,357
Net (Loss) Income —NERA 50%	$	(151,792)	$	58,527	$	148,760	$	26,343	$	104,685	$	31,217				217,739
Net Income —NERA 40%													$	278,353		278,353
															$	496,092

Financial information for the three months ended September 30, 2023

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	450,353	$	60,471	$	431,453	$	24,255	$	338,729	$	986,514	$	4,071,737	$	6,363,512
Laundry and Sundry Income		2,418		—		168		—		—		16,329		44,302		63,217
		452,771		60,471		431,621		24,255		338,729		1,002,843		4,116,039		6,426,729
Expenses
Administrative		4,426		778		10,574		729		3,140		20,469		68,852		108,968
Depreciation and Amortization		117,886		2,927		86,878		816		85,184		266,962		926,902		1,487,555
Management Fees		18,730		2,416		16,856		1,011		13,606		39,514		87,897		180,030
Operating		78,368		—		13,741		75		25,399		105,437		309,700		532,720
Renting		24,988		—		16,641		—		4,023		14,099		30,728		90,479
Repairs and Maintenance		44,602		—		64,889		—		32,802		163,163		618,245		923,701
Taxes and Insurance		69,964		15,438		48,988		4,333		38,211		132,214		680,016		989,164
		358,964		21,559		258,567		6,964		202,365		741,858		2,722,340		4,312,617
Income Before Other Income		93,807		38,912		173,054		17,291		136,364		260,985		1,393,699		2,114,112
Other Income (Loss)
Interest Expense		(194,683)		—		(85,476)		—		(59,586)		(192,376)		(1,257,252)		(1,789,373)
		(194,683)		—		(85,476)		—		(59,586)		(192,376)		(1,257,252)		(1,789,373)
Net Income (Loss)	$	(100,876)	$	38,912	$	87,578	$	17,291	$	76,778	$	68,609	$	136,447	$	324,739
Net Income (Loss)—NERA 50%	$	(50,439)	$	19,456	$	43,789	$	8,645	$	38,390	$	34,305				94,145
Net Income —NERA 40%													$	54,578		54,578
															$	148,723

Future annual mortgage maturities at September 30, 2023 are as follows:

	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
9/30/2024	$	—	$	237,577	$	—	$	16,900,000	$	—	$	17,137,577
9/30/2025		10,000,000		246,936		—		—		—		10,246,936
9/30/2026		—		256,664		—		—		—		256,664
9/30/2027		—		266,775		—		—		—		266,775
9/30/2028		—		7,533,358		—		—		125,000,000		132,533,358
Thereafter		—		—		6,000,000		—		—		6,000,000
		10,000,000		8,541,310		6,000,000		16,900,000		125,000,000		166,441,310
Less: unamortized deferred financing costs		(27,578)		(31,627)		(65,127)		(14,714)		(301,574)		(440,620)
	$	9,972,422	$	8,509,683	$	5,934,873	$	16,885,286	$	124,698,426	$	166,000,690

At September 30, 2023 the weighted average interest rate on the above mortgages was 4.23%. The effective rate was 4.29% including the amortization expense of deferred financing costs.

Summary financial information at September 30, 2022

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	5,935,095		$	2,586,302		$	4,852,841		$	79,107		$	4,551,023		$	13,688,356		$	76,657,705		$	108,350,429
Cash & Cash Equivalents		883,219			88,190			265,808			9,882			175,451			910,242			2,220,183			4,552,975
Rent Receivable		198,014			77,561			1,240			4,906			5,299			18,832			44,830			350,682
Real Estate Tax Escrow		74,625			—			69,748			—			32,497			105,494			—			282,364
Prepaid Expenses & Other Assets		321,917			56,261			117,224			757			28,665			224,845			2,298,375			3,048,044
Total Assets	$	7,412,870		$	2,808,314		$	5,306,861		$	94,652		$	4,792,935		$	14,947,769		$	81,221,093		$	116,584,494
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,958,633		$	—		$	8,731,598		$	—		$	5,926,689		$	16,869,235		$	124,633,803		$	166,119,958
Accounts Payable & Accrued Expense		120,784			2,250			92,492			2,553			59,237			163,200			756,960			1,197,476
Advance Rental Pmts& Security Deposits		332,572			19,865			280,818			—			161,741			430,923			2,837,995			4,063,914
Total Liabilities		10,411,989			22,115			9,104,908			2,553			6,147,667			17,463,358			128,228,758			171,381,348
Partners’ Capital		(2,999,119)			2,786,199			(3,798,047)			92,099			(1,354,732)			(2,515,589)			(47,007,665)			(54,796,854)
Total Liabilities and Capital	$	7,412,870		$	2,808,314		$	5,306,861		$	94,652			4,792,935		$	14,947,769		$	81,221,093		$	116,584,494
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,393,100		$	—		$	46,050		$			$			$			$	1,439,150
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,499,560)		$	—		$	(1,899,023)		$	—		$	(677,366)		$	(1,257,794)		$	(18,803,066)			(24,136,809)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(22,697,659)
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 November 1, 2022		—			—			—			175			—			—			—			175
Unsold units		—			—			—			—			—			—			—			—

Financial information for the nine months ended September 30, 2022

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,194,570	$	235,842	$	1,107,677	$	77,935	$	899,186	$	2,725,431	$	11,014,528	$	17,255,169
Laundry and Sundry Income		9,839		—		120		—		472		25,402		73,452		109,285
		1,204,409		235,842		1,107,797		77,935		899,658		2,750,833		11,087,980		17,364,454
Expenses
Administrative		14,512		5,798		26,052		2,142		9,297		52,028		163,891		273,720
Depreciation and Amortization		358,568		8,782		259,967		2,448		253,369		808,116		2,813,436		4,504,686
Management Fees		58,716		9,879		43,719		3,166		35,967		108,615		230,937		490,999
Operating		169,086		—		54,901		1,219		95,538		282,757		853,728		1,457,229
Renting		23,823		—		27,857		—		8,988		39,844		85,229		185,741
Repairs and Maintenance		132,026		3,180		125,323		—		82,989		494,223		1,393,350		2,231,091
Taxes and Insurance		199,415		47,074		131,736		13,567		114,224		387,242		1,862,717		2,755,975
		956,146		74,713		669,555		22,542		600,372		2,172,825		7,403,288		11,899,441
Income Before Other Income		248,263		161,129		438,242		55,393		299,286		578,008		3,684,692		5,465,013
Other Income (Loss)
Interest Expense		(257,574)		—		(263,093)		—		(177,129)		(568,251)		(3,817,865)		(5,083,912)
Other Income		—		—		—		—		—		—		—		—
		(257,574)		—		(263,093)		—		(177,129)		(568,251)		(3,817,865)		(5,083,912)
Net Income (Loss)	$	(9,311)	$	161,129	$	175,149	$	55,393	$	122,157	$	9,757	$	(133,173)	$	381,101
Net Income (Loss)—NERA 50%	$	(4,656)	$	80,565	$	87,575	$	27,697	$	61,078	$	4,879				257,136
Net Income —NERA 40%													$	(53,269)		(53,269)
															$	203,867

Financial information for the three months ended September 30, 2022

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	433,819	$	60,471	$	392,851	$	27,813	$	300,345	$	919,313	$	3,894,398	$	6,029,010
Laundry and Sundry Income		4,445		—		—		—		—		8,252		23,860		36,557
		438,264		60,471		392,851		27,813		300,345		927,565		3,918,258		6,065,567
Expenses
Administrative		5,640		4,250		6,060		793		3,542		16,448		54,159		90,892
Depreciation and Amortization		119,789		2,927		86,776		816		84,966		270,802		947,553		1,513,629
Management Fees		21,620		2,353		15,610		1,112		12,438		36,098		78,267		167,498
Operating		49,866		—		18,186		54		20,336		90,931		271,977		451,350
Renting		9,759		—		10,650		—		1,974		14,264		12,555		49,202
Repairs and Maintenance		62,158		—		41,565		—		37,999		188,269		595,679		925,670
Taxes and Insurance		66,313		15,566		44,269		4,448		38,546		125,879		642,107		937,128
		335,145		25,096		223,116		7,223		199,801		742,691		2,602,297		4,135,369
Income Before Other Income		103,119		35,375		169,735		20,590		100,544		184,874		1,315,961		1,930,198
Other Income (Loss)
Interest Expense		(116,185)		—		(86,694)		—		(59,000)		(191,453)		(1,283,295)		(1,736,627)
Other Income		—		—		—		—		—		—		—		—
		(116,185)		—		(86,694)		—		(59,000)		(191,453)		(1,283,295)		(1,736,627)
Net Income (Loss)	$	(13,066)	$	35,375	$	83,041	$	20,590	$	41,544	$	(6,579)	$	32,666	$	193,571
Net Income (Loss)—NERA 50%	$	(6,534)	$	17,688	$	41,520	$	10,295	$	20,771	$	(3,289)				80,451
Net Income —NERA 40%													$	13,065		13,065
															$	93,516