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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 135 added, 116 removed, 726 unchanged (26% of the section changed)

6 unchanged sentences

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, 2024.

The results of operations for the three and six month periods ended June 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

The results of operations for the three and nine month periods ended September 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30,

Rental Properties

22 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Rental income

18 unchanged sentences

( 7,314,893 )

Net Income per Unit

Net (Loss) Income

Net (loss) Income per Unit

Weighted Average Number of Units Outstanding

3 unchanged sentences

Three Months Ended

Six Months Ended

Net unrealized (loss) gain on derivative instruments for interest rate swaps

Comprehensive income

Nine Months Ended

September 30,

Net (loss) income

Net unrealized (loss) on derivative instruments for interest rate swaps

Comprehensive (Loss) income

See notes to consolidated financial statements.

12 unchanged sentences

Stock Buyback

Net unrealized gain on derivative instruments for interest rate swaps

Balance June 30 , 2024

( 1,291,593 )

( 1,613,829 )

Net unrealized (loss) on derivative instruments for interest rate swaps

Balance September 30 , 2024

( 52,513,657 )

( 12,435,122 )

( 65,460,606 )

Balance January 1, 2025

8 unchanged sentences

Net unrealized (loss) on derivative instruments for interest rate swaps

Balance June 30, 2025

Balance September 30, 2025

( 57,015,348 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

9 unchanged sentences

(Increase) in rents receivable

(Decrease) in accounts payable and accrued expense

(Decrease) Increase in accounts payable and accrued expense

( 2,032,286 )

Decrease (Increase) in real estate tax escrow

Decrease (Increase) in prepaid expenses and other assets

(Increase) in real estate tax escrow

(Increase) in prepaid expenses and other assets

( 1,346,929 )

Increase in advance rental payments and security deposits

Increase (Decrease) in advance rental payments and security deposits

Total Adjustments

25 unchanged sentences

Stock buyback

( 1,613,829 )

Distributions to partners

5 unchanged sentences

( 4,241,735 )

( 3,160,770 )

Cash and Cash Equivalents, at beginning of period

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

SIGNIFICANT ACCOUNTING POLICIES

91 unchanged sentences

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 $ 211,000 and $ 190,000 for the six months ended June 30, 2025 and 2024, respectively.

In all cases, amortization of such costs is included in interest expense and was approximately $ 393,000 and $ 285,000 for the nine months ended September 30, 2025 and 2024, respectively.

Derivative Instruments:

18 unchanged sentences

Other comprehensive income (loss) includes items that are recorded in equity, such as effective portions of derivatives designated as cash flow hedges or unrealized holding gains or losses on marketable securities available for sale.

NERA had a comprehensive loss of approximately $194,000 and comprehensive income of approximately $175,000 for the six months ended June 30, 2025 and 2024, respectively.

NERA had a comprehensive loss of approximately $220,000 and a comprehensive loss of approximately $94,000 for the nine months ended September 30, 2025 and 2024, respectively.

Income (Loss) Per Depositary Receipt:

9 unchanged sentences

The Partnership makes its temporary cash investments with high-credit quality financial institutions.

At June 30, 2025, 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 3.55 %.

At June 30, 2025 and December 31, 2024, respectively, approximately $ 18,542,000 , and $ 16,551,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

At September 30, 2025, 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 3.55 %.

At September 30, 2025 and December 31, 2024, respectively, approximately $ 14,259,000 , and $ 16,551,000 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 approximately $ 160,000 and $ 177,000 for the six months ended June 30, 2025, and 2024, respectively .

Advertising expense was approximately $ 243,000 and $ 280,000 for the nine months ended September 30, 2025 and 2024, respectively .

Rental Property Held f or Sale:

2 unchanged sentences

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.

As of June 30,2025,the Partnership has designated two properties, located at 26 Brighton Avenue, and 90 Concord Avenue, in Belmont, Massachusetts with a value of approximately $3,000,000 as properties held for sale.

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, 2025 there was capitalized interest of approximately $ 360,000 .

During the nine months ended September 30, 2025 there was capitalized interest of approximately $ 617,000 .

Extinguishment of Debt:

5 unchanged sentences

RENTAL PROPERTIES

As of June 30, 2025, the Partnership and its Subsidiary Partnerships owned 3,339 residential apartment units in 28 residential and mixed-use complexes (collectively, the “Apartment Complexes”).

As of September 30, 2025, the Partnership and its Subsidiary Partnerships owned 3,339 residential apartment units in 28 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, 2025, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline, commercial space in mixed-use properties in Boston, Brockton, Belmont and Newton, and two commercial office buildings in Belmont, all in Massachusetts.

Additionally, as of September 30, 2025, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline, commercial space in mixed-use properties in Boston, Brockton, Belmont and Newton, and two commercial office buildings in Belmont, 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, 2025 with a total of 688 apartment units, accounted for using the equity method of consolidation.

The Partnership also owned a 40 % to 50 % ownership interest in seven residential and mixed use complexes (the “Investment Properties”) at September 30, 2025 with a total of 688 apartment units, accounted for using the equity method of consolidation.

See Note 15 for summary information on these investments.

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The current contract value including change orders is approximately $ 31 million.

As of June 30, 2025, the property, located at 57 Mill Street in Woburn, MA, and which will include 72 residential units comprising approximately 93,000 square feet, is estimated to be completed during the fourth quarter of 2025.

Anticipated contract savings will reduce the actual construction costs to approximately $ 30 million.

As of September 30, 2025, the property, located at 57 Mill Street in Woburn, MA, and which will include 72 residential units comprising approximately 93,000 square feet, is estimated to be completed during the fourth quarter of 2025.

Total investment to date is approximately $ 31,800,000 , and the total investment upon completion is anticipated to be approximately $ 33 million, including soft costs, imputed interest, and taxes.

Project costs will initially be funded from Partnership reserves, but upon completion, the Partnership anticipates closing on a permanent loan, as required by MassHousing under the Chapter 40B program.

In connection with these requirements, the Partnership received a term sheet from Brookline Bank for a $ 15,000,000 loan to be funded upon completion of the project.

Project costs are being funded from Partnership reserves, but upon completion, the Partnership anticipates closing on a permanent loan, as required by MassHousing under the Chapter 40B program.

In connection with these requirements, the Partnership received a term sheet from Brookline Bank.

See Note 19 - Subsequent Events.

Rental properties consist of the following:

June 30, 2025

September 30, 2025

December 31, 2024

12 unchanged sentences

( 182,892,842 )

* Includes Real Estate Assets held for sale

RELATED PARTY TRANSACTIONS

2 unchanged sentences

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 and Hill Estates.

Total fees paid were approximately $ 1,653,000 and $ 1,571,000 for the six months ended June 30, 2025 and 2024, respectively.

Total fees paid were approximately $ 2,561,000 and $ 2,374,000 for the nine months ended September 30, 2025 and 2024, respectively.

The Partnership Agreement permits the General Partner or the Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA.

During the six months ended June 30, 2025 and 2024, approximately $ 417,000 and $ 568,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements.

During the nine months ended September 30, 2025 and 2024, approximately $ 1,422,000 and $ 798,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements.

Of the 2025 expenses referred to above, approximately $ 165,000 consisted of repairs and maintenance, and $ 178,000 for administrative expense.

1 unchanged sentence

Additionally in 2025, the Hamilton Company received approximately $ 710,000 from the Investment Properties of which approximately $ 580,000 was the management fee, approximately $ 93,000 for construction, architectural services, and supervision of capital projects, approximately $ 27,000 for repairs and maintenance, and approximately $ 10,000 for legal expense.

The management fee is equal to 4 % of gross receipts of rental income on the majority of the investment properties, 3 % on Hill Estates, and 2 % on Dexter Park.

The management fee is equal to 4 % of gross receipts of rental income on the majority of the 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 $ 2,255,000 and $ 2,086,000 for the six months ended June 30, 2025 and 2024, respectively.

Total reimbursement was approximately $ 3,519,000 and $ 3,264,000 for the nine months ended September 30, 2025 and 2024, 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, 2025, the Partnership incurred $ 32,000 for the employer’s match portion to the plan.

For the six months ended June 30, 2024, the Partnership incurred $ 32,000 for the employer’s match portion to the plan .

For each of the nine months ended September 30, 2025 and 2024, the Partnership incurred $ 48,000 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 three months ended June 30, 2025 and 2024 the Management Company charged the Partnership $ 62,500 ($ 125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

During the nine months ended September 30, 2025 and 2024 the Management Company charged the Partnership $ 93,750 ($ 125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

Sally Michael is a Director of New Real, Inc., and she is a Partner at Saul Ewing Arnstein & Lear LLP.

Saul Ewing billed the Partnership for legal fees totaling approximately $ 275,000 and $ 70,000 for the six months ended June

30, 2025 and 2024, respectively.

David Reier is a Director of New Real, Inc., who billed the Partnership approximately $ 6,000 for legal fees for the period ending June 30, 2025.

Saul Ewing billed the Partnership for legal fees totaling approximately $ 323,000 and $ 117,000 for the nine months ended

September 30, 2025 and 2024, respectively.

David Reier is a Director of New Real, Inc., who billed the Partnership approximately $ 7,400 for legal fees for the nine month period ending September 30, 2025.

The Partnership has invested in seven limited partnerships, which have invested in mixed use residential apartment complexes.

4 unchanged sentences

PREPAID EXPENSES and OTHER ASSETS

Approximately $ 3,658,000 , and $ 3,463,000 of security deposits are included in prepaid expenses and other assets at June 30, 2025 and December 31, 2024, respectively.

Also, included in prepaid expenses and other assets at June 30, 2025 and December 31, 2024 is approximately $ 1,784,000 and $ 2,260,000 , respectively, held in escrow to fund future capital improvements.

In addition, included in prepaid expenses and other assets at June 30, 2025 is approximately $ 895,000 of mortgage insurance escrows.

Approximately $ 3,495,000 , and $ 3,463,000 of security deposits are included in prepaid expenses and other assets at September 30, 2025 and December 31, 2024, respectively.

Also, included in prepaid expenses and other assets at September 30, 2025 and December 31, 2024 is approximately $ 1,908,000 and $ 2,260,000 , respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of rental properties are included in prepaid expenses and other assets.

Intangible assets are approximately $ 5,128,000 and $ 334,000 net of accumulated amortization of approximately $ 1,441,000 and $ 1,215,000 at June 30, 2025, and at December 31, 2024, respectively.

Financing fees in association with the line of credit of approximately $ 180,000 and $ 217,000 are net of accumulated amortization of approximately $ 46,000 and $ 8,000 at June 30, 2025 and December 31, 2024 respectively.

Intangible assets are approximately $ 3,910,000 and $ 334,000 net of accumulated amortization of approximately $ 2,659,000 and $ 1,215,000 at September 30, 2025, and at December 31, 2024, respectively.

Financing fees in association with the line of credit of approximately $ 161,000 and $ 217,000 are net of accumulated amortization of approximately $ 64,000 and $ 8,000 at September 30, 2025 and December 31, 2024 respectively.

MORTGAGE NOTES PAYABLE

At June 30, 2025 and December 31, 2024, 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, 2025, the interest rates on these loans ranged from 2.97 % to 5.99 %, payable in monthly installments aggregating approximately $ 2,101,000 including principal, to various dates through 2035.

At September 30, 2025 and December 31, 2024, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2.

At September 30, 2025, the interest rates on these loans ranged from 2.97 % to 5.99 %, payable in monthly installments aggregating approximately $ 2,103,000 including principal, to various dates through 2035.

The majority of the mortgages are subject to prepayment penalties.

At June 30, 2025, the weighted average interest rate on the above mortgages was 4.21 %.

At September 30, 2025, the weighted average interest rate on the above mortgages was 4.22 %.

The effective rate of 4.30 % includes the amortization expense of deferred financing costs.

1 unchanged sentence

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 $ 3,112,000 and $ 2,399,000 are net of accumulated amortization of approximately $ 1,869,000 and $ 1,733,000 at June 30, 2025 and December 31, 2024, respectively, which offset the total mortgage notes payable.

Financing fees of approximately $ 2,930,000 and $ 2,399,000 are net of accumulated amortization of approximately $ 2,050,000 and $ 1,733,000 at September 30, 2025 and December 31, 2024, respectively, which offset the total mortgage notes payable.

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

9 unchanged sentences

The Loan is prepayable, without prepayment penalty, upon not less than seven ( 7 ) days prior written notice to KeyBank as the Lender.

Approximate annual maturities at June 30, 2025 are as follows:

The Partnership is currently in the process of refinancing the loan.

On July 10, 2025, the Partnership borrowed an additional $ 682,520 from Brookline Bank as an earnout in connection with the loan at Staples Plaza.

The earnout tranche bears an interest rate of 5.97 %, is coterminous with the original underlying loan, and amortizes on a 30-year schedule.

Approximate annual maturities at September 30, 2025 are as follows:

2026—current maturities

7 unchanged sentences

This fee is waived for any period in which the Partnership maintains aggregate deposits of twenty million dollars with the Lender.

As of June 30, 2025, the Partnership was in compliance with the financial covenants and did not incur an unused line fee.

As of September 30, 2025, the Partnership was in compliance with the financial covenants except for the liquidity covenant, and did not incur an unused line fee.

The line of credit may be used for acquisition, refinancing, improvements, working capital and other needs of the Partnership.

4 unchanged sentences

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, 2025, amounts received for prepaid rents of approximately $ 4,363,000 are included in cash and cash equivalents, and security deposits of approximately $ 3,658,000 are included in prepaid expenses and other assets and are restricted cash.

At September 30, 2025, amounts received for prepaid rents of approximately $ 4,246,000 are included in cash and cash equivalents, and security deposits of approximately $ 3,495,000 are included in prepaid expenses and other assets and are restricted cash.

PARTNERS’ CAPITAL

5 unchanged sentences

In May 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on May 30, 2025.

On August 7, 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on September 30, 2025.

In 2024, the Partnership paid a total distribution of an aggregate $ 96.00 per Unit ($ 3.20 per Receipt) for a total payment of $ 11,244,559 .

2 unchanged sentences

The following is information per Depositary Receipt:

Six Months Ended

Nine Months Ended

September 30,

Net Income per Depositary Receipt

1 unchanged sentence

TREASURY UNITS

Treasury Units at June 30, 2025 are as follows:

Treasury Units at September 30, 2025 are as follows:

General Partnership

5 unchanged sentences

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.

On March 12, 2025, the General Partner authorized the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written

trading plan that complies with the requirements of Rule 10b5-1, Depositary Receipts and Partnership Units in such quantities, at such prices, in such manner and on such terms and conditions as the Authorized Persons determine are in the best interests of the Partnership;

On March 12, 2025, the Board of Directors authorized the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written trading plan that complies with the requirements of Rule 10b5-1, Depositary Receipts and Partnership Units in such quantities, at such prices, in such manner and on such terms and conditions as the Authorized Persons determine are in the best interests of the Partnership;

provided, however, that (i) the aggregate cost of Depositary Receipts and Partnership Units repurchased shall not exceed $ 5 million, (ii) no Depositary Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date of the plan, (iii) no Depositary Receipt shall be repurchased in excess of $ 95 per depositary receipt ( the “Repurchase Plan”).

1 unchanged sentence

The Repurchase Plan shall be made in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be made in accordance with all applicable laws and regulations in effect from time to time.

From August 20, 2007 through June 30, 2025, the Partnership has repurchased 1,553,365 Depositary Receipts at an average price of $ 32.30 per receipt (or $ 969 per underlying Class A Unit), 4,561 Class B Units and 240 General Partnership Units, both at an average price of $ 1,294 per Unit, totaling approximately $ 56,381,000 including brokerage fees paid by the Partnership .

During the six months ended June 30, 2025, the Partnership purchased a total of 3,007 Depositary Receipts.

From August 20, 2007 through September 30, 2025, the Partnership has repurchased 1,554,701 Depositary Receipts at an average price of $ 31.94 per receipt (or $ 958.20 ) per underlying Class A Unit), 4,572 Class B Units and 241 General Partnership Units, both at an average price of $ 1,296 per Unit, totaling approximately $ 56,503,000 including brokerage fees paid by the Partnership .

During the nine months ended September 30, 2025, the Partnership purchased a total of 4,343 Depositary Receipts.

The average price was $ 75.61 per receipt, or $ 2,268.30 per unit.

5 unchanged sentences

Some of the legal and other expenses related to these proceedings are covered by insurance and none of these costs and expenses are expected to have a material adverse effect on the Consolidated Financial Statements of the Partnership.

In addition, the Partnership has a contractual commitment of approximately $ 30,700,000 related to the ongoing construction project at the Mill Street Development.

In addition, the Partnership has a contractual commitment of approximately $ 30.9 million related to the ongoing construction project at the Mill Street Development.

RENTAL INCOME

During the six months ended June 30, 2025, approximately 94 % of rental income was related to residential apartments and condominium units with leases of one year or less.

During the nine months ended September 30, 2025, approximately 94 % 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 6 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30 2025 as follows:

Approximately 6 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at September 30 2025 as follows:

Property Leases

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 $ 466,000 and $ 398,000 for the six months ended June 30, 2025 and 2024 respectively.

Aggregate contingent rentals from continuing operations were approximately $ 679,000 and $ 580,000 for the nine months ended September 30, 2025 and

2024 respectively.

Trader Joe’s and Blue Pearl, tenants at Staples Plaza and Walgreen’s, a tenant at 653 Worcester Road, Framingham, Massachusetts respectively, are approximately 34 % of the total commercial rental income.

4 unchanged sentences

annual base rent for

Through June 30,

Through September 30,

expiring leases

2 unchanged sentences

expiring leases

Rents receivable are net of an allowance for doubtful accounts of approximately $ 958,000 and $ 1,085,000 at June 30, 2025 and December 31, 2024.

Included in rents receivable at June 30, 2025 is approximately $ 258,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

Rents receivable are net of an allowance for doubtful accounts of approximately $ 828,000 and $ 1,085,000 at September 30, 2025 and December 31, 2024.

Included in rents receivable at September 30, 2025 is approximately $ 99,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

CASH FLOW INFORMATION

During the six months ended June 30, 2025 and 2024, cash paid for interest was approximately $ 7,323,000 , and $ 7,649,000 respectively.

Cash paid for state income taxes was approximately $ 127,000 and $ 100,000 during the six months ended June 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025 and 2024, cash paid for interest was approximately $ 12,403,000 , and $ 11,387,000 respectively.

Cash paid for state income taxes was approximately $ 155,000 and $ 100,000 during the nine months ended September 30, 2025 and 2024, respectively.

In 2025, the Partnership acquired construction in progress through accounts payable and accruals, which represented a non-cash investing activity of approximately $ 3,577,000 .

Interest capitalized amounted to approximately $ 360,000 for the six months ended June 30, 2025.

Interest capitalized amounted to approximately $ 617,000 and $ 89,000 for the nine months ended September 30, 2025 and 2024, respectively.

The Partnership purchased the Hill Estates property partially through a mortgage payable which represents noncash Investing and Financing activities of $ 67,500,000 .

1 unchanged sentence

Fair Value Measurements on a Recurring Basis

At June 30, 2025 and December 31, 2024, 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.

At September 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, 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 September 30, 2025 and December 31, 2024 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, 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.

The Partnership had investments in U.S.

6 unchanged sentences

Treasury bills classified within Level I of the fair value hierarchy.

At June 30, 2025 and December 31, 2024 we estimated the fair value of our mortgage payable, derivative financial instrument, 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, 2025 and December 31, 2024, as compared with those in effect when the debt was issued or acquired.

At September 30, 2025 and December 31, 2024 we estimated the fair value of our mortgage payable, derivative financial instrument, 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 September 30, 2025 and December 31, 2024, 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.

At June 30, 2025 and at December 31, 2024, the Partnership’s line of credit had an outstanding balance of zero .

At September 30, 2025 and at December 31, 2024, the Partnership’s line of credit had an outstanding balance of zero .

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

5 unchanged sentences

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

June 30, 2025

September 30, 2025

Carrying Value

7 unchanged sentences

* 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, 2025 and December 31, 2024.

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, 2025 and current estimates of fair value may differ significantly from the amounts presented herein.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of September 30, 2025 and December 31, 2024.

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 September 30, 2025 and current estimates of fair value may differ significantly from the amounts presented herein.

DERIVATIVE FINANCIAL INSTRUMENTS

3 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Partnership making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

forecasted transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Partnership’s variable rate debt.

During the next 12 months, the Partnership estimates $ 57,000 will be reclassified as a decrease to interest expense .

As of June 30, 2025, the Partnership had one interest rate swap outstanding with a notional amount of approximately $ 215,000 designated as cash flow hedges of interest rate risk.

As of June 30, 2025, the Partnership did not have any interest rate derivatives in a net liability position.

The table below presents the fair value of the Partnership’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2025 and December 31, 2024.

During the next 12 months, the Partnership estimates approximately $ 44,000 will be reclassified as a decrease to interest expense .

As of September 30, 2025, the Partnership had one interest rate swap outstanding with a notional amount of approximately $ 189,000 designated as cash flow hedges of interest rate risk.

As of September 30, 2025, the Partnership did not have any interest rate derivatives in a net liability position.

The table below presents the fair value of the Partnership’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2025 and December 31, 2024.

Asset Derivatives designated

September 30,

as hedging instruments

2 unchanged sentences

Prepaid Expenses and Other Assets

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended June 30, 2025 and 2024.

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended September 30, 2025 and 2024.

Location of Gain

15 unchanged sentences

of operations

Three Months Ended June 30,

Three Months Ended September 30,

Interest rate swaps

3 unchanged sentences

( 3,831,009 )

Six Months Ended June 30,

Nine Months Ended September 30,

Interest rate swaps

17 unchanged sentences

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, 2025, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2021 forward.

As of September 30, 2025, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2021 forward.

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.

Partnership has between a 40 %- 50 % ownership interests in each investment.

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.

14 unchanged sentences

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 June 30, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 125,000,000 .

At September 30, 2025, 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.

7 unchanged sentences

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.

On September 30, 2025, the property was refinanced with a 10 year mortgage in the amount of $ 12,214,000 at a fixed rate of 5.610 % interest only.

The Joint Venture paid off the prior mortgage of approximately $ 10,000,000 with the proceeds of the new mortgage and held the remaining $ 2,210,000 at the property as cash reserves.

The costs associated with the refinancing were approximately $ 170,000 .

As a result of the distribution, the carrying value of the investment fell below zero .

1 unchanged sentence

Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed.

At June 30, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 10,000,000 .

At September 30, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 12,214,000 .

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.

The Partnership is currently in the process of refinancing the Hamilton Essex 81, LLC mortgage.

See Note 19, SUBSEQUENT EVENTS.

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.

2 unchanged sentences

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.

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.

6 unchanged sentences

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.

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.

2 unchanged sentences

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 June 30 2025, the balance on this mortgage before unamortized deferred financing costs is $ 6,000,000 .

At September 30 2025, the balance on this mortgage before unamortized deferred financing costs is $ 6,000,000 .

This investment is referred to as Hamilton Minuteman, LLC.

14 unchanged sentences

At June 30, 2025, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

At September 30, 2025, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

The investment is referred to as Hamilton on Main LLC.

6 unchanged sentences

Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed.

At June 30, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $ 8,119,000 .

At September 30, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $ 8,057,000 .

This investment is referred to as 345 Franklin, LLC.

Summary financial information at June 30, 2025

Summary financial information at September 30, 2025

Rental Properties

27 unchanged sentences

Total units/condominiums

Financial information for the six months ended June 30, 2025

Financial information for the nine months ended September 30, 2025

Rental Income

16 unchanged sentences

Net Income —NERA 40 %

Financial information for the three months ended June 30, 2025

Financial information for the three months ended September 30, 2025

Rental Income

13 unchanged sentences

( 1,902,067 )

Net Income (Loss)

Net Income (Loss)—NERA 50 %

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income —NERA 40 %

Future annual mortgage maturities at June 30, 2025 are as follows:

Future annual mortgage maturities at September 30, 2025 are as follows:

unamortized deferred financing costs

At June 30, 2025, the weighted average interest rate on the above mortgages was 4.32 %.

At September 30, 2025, the weighted average interest rate on the above mortgages was 4.28 %.

The effective rate was 4.35 % including the amortization expense of deferred financing costs.

Summary financial information at June 30, 2024

Summary financial information at September 30, 2024

Rental Properties

24 unchanged sentences

( 21,188,233 )

( 29,751,455 )

Total Investment in Unconsolidated Joint Ventures (Net)

1 unchanged sentence

Total units/condominiums

Financial information for the six months ended June 30, 2024

Financial information for the nine months ended September 30, 2024

Rental Income

14 unchanged sentences

( 5,303,296 )

Net Income (Loss)

Net Income (Loss)—NERA 50 %

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income —NERA 40 %

Financial information for the three months ended June 30, 2024

Financial information for the three months ended September 30, 2024

Rental Income

11 unchanged sentences

Interest Income

Other income (Expense)

( 1,260,526 )

( 1,813,936 )

Net Income (Loss)

Net Income (Loss)—NERA 50 %

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income —NERA 40 %

6 unchanged sentences

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, 2025 was $ 32,000 .

Total expense recognized by the Partnership for the 401(k) Plan for the nine months ended September 30, 2025 was $ 48,000 .

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

22 unchanged sentences

SUBSEQUENT EVENTS

On August 7, 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on September 30, 2025.

From July 1, 2025 through August 8, 2025, the Partnership has purchased 533 Depository Receipts .

On July 14, 2025, the Partnership entered into a loan commitment with KeyBank for the refinancing of the existing 81 Essex Street loan that matures on October 1, 2025.

The loan commitment is for up to $ 12,104,000 at a fixed interest rate to be determined at Rate Lock and for an interest only term of ten years .

On November 6, 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on December 31, 2025.

From October 1, 2025 through November 7, 2025, the Partnership has purchased 1,683 Depository Receipts .

On October 10, 2025, the Partnership signed an updated term sheet from Brookline Bank to provide a two-year Bridge Loan in the amount of $ 17,500,000 for the Mill Street Development project.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements