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Item 1. Financial Statements

2026-05-08 compared with 2025-11-07 · 133 added, 237 removed, 624 unchanged (37% 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, 2025.

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.

The results of operations for the three month period ended March 31, 2026 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

3 unchanged sentences

Real Estate Tax Escrows

Investment in U.S.

Treasury Bills

Prepaid Expenses and Other Assets

10 unchanged sentences

( 74,215,581 )

Total Liabilities and Partners’ Capital

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Nine Months Ended

September 30,

Three Months Ended March 31,

Rental income

11 unchanged sentences

( 3,791,432 )

( 13,377,493 )

( 11,637,720 )

Income from investments in unconsolidated joint ventures

( 5,266,129 )

( 2,561,278 )

(Loss) on Sale of Real Estate

( 5,403,854 )

1 unchanged sentence

Net (Loss) Income

( 3,907,672 )

Net (Loss) Income per Unit

3 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Nine Months Ended

September 30,

Three Months Ended March 31,

Net (Loss) income

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

( 3,907,672 )

Other comprehensive (loss) income :

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

Comprehensive (Loss) income

( 3,882,966 )

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

Partner’s Capital

Comprehensive Income

Partners' Capital

Comprehensive

Balance January 1, 2025

7 unchanged sentences

Stock Buyback

( 1,291,593 )

( 1,613,829 )

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

Balance September 30 , 2024

Balance March 31 , 2025

( 57,356,208 )

8 unchanged sentences

( 1,394,763 )

( 15,412,283 )

Stock Buyback

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

Balance September 30, 2025

( 3,126,138 )

( 3,907,672 )

Net unrealized gain on derivative instruments for interest rate swaps

Balance March 31, 2026

( 63,922,293 )

( 15,143,558 )

( 79,627,506 )

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

( 3,907,672 )

Adjustments to reconcile net income to net cash provided by operating activities

1 unchanged sentence

Treasury Bills

( 3,362,372 )

Depreciation and amortization

1 unchanged sentence

(Income) from investments in joint ventures

Loss on sale of real estate

Change in operating assets and liabilities

Proceeds from unconsolidated joint ventures

(Increase) in rents receivable

(Decrease) Increase in accounts payable and accrued expense

(Increase) Decrease in rents receivable

(Decrease) in accounts payable and accrued expense

( 1,420,695 )

(Increase) in real estate tax escrow

(Increase) in prepaid expenses and other assets

( 2,390,536 )

Increase (Decrease) in advance rental payments and security deposits

Decrease (Increase) in real estate tax escrow

Decrease in prepaid expenses and other assets

(Decrease) Increase in advance rental payments and security deposits

Total Adjustments

5 unchanged sentences

( 31,060,131 )

( 138,877,950 )

Proceeds from U.S.

2 unchanged sentences

( 2,589,943 )

( 7,961,579 )

Purchase of rental property

( 108,885,341 )

Improvement of rental properties

1 unchanged sentence

( 2,112,160 )

Sale of rental properties

Net cash (used in) provided by investing activities

( 1,073,869 )

( 9,570,177 )

Cash Flows from Financing Activities

Principal payments of mortgage notes payable

( 21,274,632 )

( 2,098,252 )

Proceeds from Mortgage Notes Payable

Stock buyback

( 1,613,829 )

Distributions to partners

1 unchanged sentence

( 12,600,657 )

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

( 2,342,315 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 13,426,187 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 1,109,227 )

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

March 31, 2026

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 $ 393,000 and $ 285,000 for the nine months ended September 30, 2025 and 2024, respectively.

In all cases, amortization of such costs is included in interest expense and was approximately $ 137,000 and $ 95,000 for the three months ended March 31, 2026 and 2025, respectively.

Derivative Instruments:

8 unchanged sentences

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

Investments in Treasury Bills:

Investments in U.S.

Treasury bills had been recorded at amortized cost and classified as held to maturity as the Partnership had the intent and the ability to hold them until they mature.

The carrying value of the Treasury bills were adjusted for accretion of discounts over the remaining life of the investment.

Income related to the Treasury bills is recognized in interest income in the Partnership’s consolidated statement of income.

Segment Reporting:

2 unchanged sentences

Other Comprehensive Income (Loss):

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

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 gain of approximately $ 25,000 and a comprehensive loss of approximately $ 130,000 for the three months ended March 31, 2026 and 2025, respectively.

Income (Loss) Per Depositary Receipt:

9 unchanged sentences

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

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.

At March 31, 2026, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates, respectively, from 0.35 % to 2.8 %.

At March 31, 2026 and December 31, 2025, respectively, approximately $ 25,183,000 , and $ 26,200,000 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 $ 243,000 and $ 280,000 for the nine months ended September 30, 2025 and 2024, respectively .

Advertising expense was approximately $ 99,000 and $ 98,000 for the three months ended March 31, 2026 and 2025, respectively .

Rental Property Held f or Sale:

4 unchanged sentences

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

During the three months ended March 31, 2026 there was no interest capitalized.

For the three months ended March 31, 2025,there was capitalized interest of approximately $ 149,000 .

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.

The Partnership accounts for refinancings, modifications, and extinguishments of debt in accordance with ASC 470-50, Debt—Modifications and Extinguishments.

When existing mortgages or other borrowings are refinanced with the same lender, the Partnership evaluates whether the terms of the new debt are substantially different from those of the existing debt.

If the refinancing is determined to be substantially different, the transaction is accounted for as an extinguishment of debt, and any unamortized deferred financing costs, original issuance discounts or premiums related to the extinguished debt are written off and included in loss on extinguishment of debt.

If the refinancing is determined to be substantially the same, the transaction is accounted for as a modification (exchange) of debt, and no gain or loss is recognized.

The carrying amount of the existing debt is adjusted for any fees or costs incurred.

All refinancings qualify as extinguishment of debt.

2 unchanged sentences

RENTAL PROPERTIES

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”).

As of March 31, 2026, the Partnership and its Subsidiary Partnerships owned 3,411 residential apartment units in 27 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 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.

Additionally, as of March 31, 2026, 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, 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 September 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 March 31, 2026 with a total of 688 apartment units, accounted for using the equity method of consolidation.

See Note 15 for summary information on these investments.

6 unchanged sentences

These amounts are being amortized over 12 and 36 months respectively.

On January 28, 2026, the Partnership sold the two commercial office buildings for the sales price of approximately $ 2,600,000 , with closing costs of approximately $ 142,000 , incurring a loss of approximately $ 151,000 .

In December, 2023, the Partnership received approval from MassHousing to construct a 72 unit apartment building in accordance with Chapter 40B to include 17 affordable units on the Mill Street Development site.

In order to initiate construction, the Partnership demolished the existing building structures and started construction in January 2024.

In order to comply with the permanent financing requirements for a 40B project, Mill Street Development signed a term sheet for a loan of up to $ 15 million, to be funded upon completion of the development project.

In addition, Mill Street Development deposited $ 75,000 into escrow to comply with the 40B project requirement of a cost certification of total development costs upon completion of the project.

Total construction costs for the project are expected to be approximately $ 30,000,000 , with construction completion anticipated during the fourth quarter of 2025 .

On December 29, 2023, the Partnership signed a contract with a general contractor, NEI General Contracting, Inc., for the construction of the Mill Street Development project for approximately $ 29,700,000 .

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

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 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.

The Partnership demolished the existing building structures in order to start construction in 2024.The property was placed in service on January 1, 2026.Total investment was approximately $ 35 million.

On December 23, 2025, the Partnership closed a $ 17,500,000 loan with Brookline Bank at an interest rate of 5.67 % interest only, with a two year term.

Rental properties consist of the following:

September 30, 2025

March 31, 2026

December 31, 2025

12 unchanged sentences

( 194,614,338 )

* 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 $ 2,561,000 and $ 2,374,000 for the nine months ended September 30, 2025 and 2024, respectively.

Total fees paid were approximately $ 916,000 and $ 818,000 for the three months ended March 31, 2026 and 2025, 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 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.

During the three months ended March 31, 2026 and 2025, approximately $ 398,000 and $ 195,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements.

Of the 2026 expenses referred to above, approximately $ 53,000 consisted of repairs and maintenance, and $ 90,000 for administrative expense.

Approximately $ 1,075,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties, and approximately $ 4,000 for brokerage fees.

Approximately $ 255,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties.

Additionally in 2026, the Hamilton Company received approximately $ 244,000 from the Investment Properties of which approximately $ 191,000 was the management fee, approximately $ 37,000 for construction, architectural services, and supervision of capital projects, approximately $ 10,000 for repairs and maintenance, and approximately $ 6,000 for legal expense.

1 unchanged sentence

The Partnership reimburses the Management Company for the payroll and related expenses of the employees who work at the properties.

Total reimbursement was approximately $ 3,519,000 and $ 3,264,000 for the nine months ended September 30, 2025 and 2024, respectively.

Total reimbursement was approximately $ 1,264,000 and $ 1,074,000 for the three months ended March 31, 2026 and 2025, 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 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.

For the three months ended March 31, 2026, the Partnership incurred $ 19,000 for the employer’s match portion to the plan.

For the three months ended March 31, 2025, the Partnership incurred $ 16,000 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 16 people.

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.

During the three months ended March 31, 2026 and 2025 the Management Company charged the Partnership $ 31,250 ($ 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 $ 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.

Saul Ewing billed the Partnership for legal fees totaling approximately $ 41,000 and $ 9,000 for the three months ended March 31, 2026 and 2025 respectively.

David Reier is a Director of New Real, Inc., who billed the Partnership approximately $ 4,000 and $ 2,000 for legal fees for the three months ended March 31, 2026 and 2025 respectively.

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 $ 3,495,000 , 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.

Approximately $ 3,598,000 , and $ 3,593,000 of security deposits are included in prepaid expenses and other assets at March 31, 2026 and December 31, 2025, respectively.

Also, included in prepaid expenses and other assets at March 31, 2026 and December 31, 2025 is approximately $ 2,299,000 and $ 2,158,000 , 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 $ 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.

Intangible assets are approximately $ 1,474,000 and $ 2,692,000 net of accumulated amortization of approximately $ 5,094,000 and $ 3,876,000 at March 31, 2026, and at December 31, 2025, respectively.

Financing fees in association with the line of credit of approximately $ 123,000 and $ 142,000 are net of accumulated amortization of approximately $ 102,000 and $ 83,000 at March 31, 2026, and December 31, 2025 respectively.

MORTGAGE NOTES PAYABLE

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.

At March 31, 2026 and December 31, 2025, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2,with interest rates ranging from 2.97 % to 5.99 %, payable in monthly installments aggregating approximately $ 2,148,000 including principal, to various dates through 2035.

The majority of the mortgages are subject to prepayment penalties.

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

At March 31, 2026, the weighted average interest rate on the above mortgages was 4.19 %.

The effective rate of 4.26 % 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 $ 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.

Financing fees of approximately $ 3,297,000 and $ 3,434,000 are net of accumulated amortization of approximately $ 2,225,000 and $ 2,088,000 at March 31, 2026 and December 31, 2025, respectively, which offset the total mortgage notes payable.

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

5 unchanged sentences

On June 18, 2025, the Partnership entered into an interim loan agreement with KeyBank for $ 67,500,000 at a floating interest rate of the SOFR rate plus 150 basis points.

The note is due on December 17, 2025.

Proceeds of the loan were used for the purchase of Hill Estates.

The loan is secured by a mortgage on the property and is limited guaranteed by the Partnership.

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

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

The loan was secured by a mortgage on the property and is limited guaranteed by the Partnership.

The loan was refinanced on December 30, 2025.

The loan is interest only, at 5.19 %, and a maturity date of December 30, 2035.

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:

Approximate annual maturities at March 31, 2026 are as follows:

2027—current maturities

1 unchanged sentence

Line of Credit

On November 21, 2024, the Partnership entered into an agreement with Brookline Bank for a new $ 25,000,000 revolving line of credit.

On November 21, 2024, the Partnership entered into an agreement with Brookline Bank for a $ 25,000,000 revolving line of credit.

The term of the line is three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5 %.

1 unchanged sentence

The Partnership incurred a commitment fee of $ 125,000 .

The Partnership will be charged annually an unused line fee, equal to seventy-five basis points ( 0.75 %) between the difference of the maximum availability and the outstanding principal of the line of credit.

The Partnership will be charged annually an unused line fee, equal to seventy-five basis points ( 0.75 %) of the difference between the maximum availability and the outstanding principal of the line of credit.

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

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.

As of March 31, 2026, the Partnership was in compliance with the financial covenants.

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 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.

At March 31, 2026, amounts received for prepaid rents of approximately $ 4,473,000 are included in cash and cash equivalents, and security deposits of approximately $ 3,598,000 are included in prepaid expenses and other assets and are restricted cash.

PARTNERS’ CAPITAL

2 unchanged sentences

All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

In March 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on March 31, 2025.

In addition to the quarterly distribution, there was a special distribution of $ 96.00 per Class A unit ($ 3.20 per Receipt) payable on March 31, 2025 .

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 .

In March 2026, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), for a total payment of $ 1,394,763 , on March 31, 2026.

In 2025, the Partnership paid an aggregate distribution of $ 144.00 per Unit ($ 4.80 per Receipt) for a total payment of $ 16,793,527 in 2025.

The Partnership has entered into a deposit agreement with an agent to facilitate public trading of limited partners’ interests in Class A Units.

1 unchanged sentence

The following is information per Depositary Receipt:

Nine Months Ended

September 30,

Net Income per Depositary Receipt

Three Months Ended

Net (Loss) Income per Depositary Receipt

Distributions per Depositary Receipt

TREASURY UNITS

Treasury Units at September 30, 2025 are as follows:

Treasury Units at March 31, 2026 are as follows:

General Partnership

1 unchanged sentence

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 required 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.

4 unchanged sentences

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 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.

On March 11, 2026, the General Partner authorized the President and Treasurer to renew the Repurchase Plan for one year.

From August 20, 2007 through March 31, 2026, the Partnership has repurchased 1,561,062 Depositary Receipts at an average price of $ 32.09 per receipt (or $ 962.70 ) per underlying Class A Unit), 4,622 Class B Units and 243 General Partnership Units, both at an average price of $ 1,304 per Unit, totaling approximately $ 57,045,000 including brokerage fees paid by the Partnership .

During the three months ended March 31, 2026, the Partnership purchased a total of 1,653 Depositary Receipts.

The average price was $ 65.03 per receipt, or $ 1,951 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 $ 30.9 million related to the ongoing construction project at the Mill Street Development.

RENTAL INCOME

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.

During the three months ended March 31, 2026, 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 6 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at September 30 2025 as follows:

Approximately 5 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at March 31, 2026 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 $ 679,000 and $ 580,000 for the nine months ended September 30, 2025 and

2024 respectively.

Aggregate contingent rentals from continuing operations were approximately $ 239,000 and $ 184,000 for the three months ended March 31, 2026 and 2025 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 33 % of the total commercial rental income.

4 unchanged sentences

annual base rent for

Through September 30,

Through March 31,

expiring leases

2 unchanged sentences

expiring leases

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.

Rents receivable are net of an allowance for doubtful accounts of approximately $ 979,000 and $ 879,000 at March 31, 2026 and December 31, 2025.

Included in rents receivable at March 31, 2026 is approximately $ 12,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

CASH FLOW INFORMATION

During the 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.

During the three months ended March 31, 2026 and 2025, cash paid for interest was approximately $ 5,251,000 , and $ 3,696,000 , respectively.

Cash paid for state income taxes was approximately $ 18,000 and $ 82,000 during the three months ended March 31, 2026 and 2025, respectively.

In 2025, the Partnership acquired construction in progress through accounts payable and accruals, which represented a non-cash investing activity of approximately $ 3,643,000 .

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 .

Interest capitalized amounted to approximately $ 149,000 for the three months ended March 31, 2025.There was no interest expense capitalized for the three months ended March 31,2026.

FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

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.

At March 31, 2026 and December 31, 2025, 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 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.

Treasury bills, some of which matured over a period greater than 90 days and were classified as short-term investments.

Treasury bills were carried at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature.

The carrying value of the U.S.

Treasury bills were adjusted for accretion of discounts over the remaining life of the investment.

Income related to the U.S.

Treasury bills is recognized in interest income in the Partnership’s consolidated statement of income.

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

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.

At March 31, 2026 and December 31, 2025 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 March 31, 2026 and December 31, 2025 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 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 March 31, 2026 and December 31, 2025, 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 September 30, 2025 and at December 31, 2024, the Partnership’s line of credit had an outstanding balance of zero .

At March 31, 2026 and at December 31, 2025, 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.

September 30, 2025

March 31, 2026

Carrying Value

1 unchanged sentence

Cash equivalents

Treasury bills

Mortgage payable *

3 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 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.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2026 and December 31, 2025.

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 March 31, 2026 and current estimates of fair value may differ significantly from the amounts presented herein.

DERIVATIVE FINANCIAL INSTRUMENTS

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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.

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 approximately $ 43,000 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.

As of March 31, 2026, the Partnership had one interest rate swap outstanding with a notional amount of approximately $ 235,000 designated as cash flow hedges of interest rate risk.

As of March 31, 2026, 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 March 31, 2026 and December 31, 2025.

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 September 30, 2025 and 2024.

Location of Gain

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended March 31, 2026 and 2025.

Derivatives in Cash Flow Hedging Relationships

Amount of Gain

Total Amount of

or (Loss) Recognized

in OCI on Derivative

Location of Gain

Interest Expense

OCI Into Income

Amount of Gain

OCI into Income

Location of Gain

or (Loss) Recognized

Total Amount of

Interest Expense

presented in the

Derivatives in Cash Flow

or (Loss) Recognized

from Accumulated

consolidated statements

Hedging Relationships

in OCI on Derivative

OCI Into Income

OCI into Income

of operations

Three Months Ended September 30,

Interest rate swaps

Interest expense

Interest and other investment income (loss)

( 5,440,905 )

( 3,831,009 )

Nine Months Ended September 30,

Quarter Ended March 31,

Interest rate swaps

5 unchanged sentences

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 carryovers and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions.

Federal taxable income of approximately $ 21,102,000 was approximately $ 5,440,000 more than statement income for the year ended December 31, 2024.

Federal taxable income of approximately $ 5,081,000 was approximately $ 950,000 less than statement income for the year ended December 31, 2025.

The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2025 is approximately $ 17,000,000 less than the statement basis.

The primary reasons for the difference in tax basis are tax free exchanges, accelerated depreciation, bonus depreciation, and other timing differences.

The Partnership’s Federal tax basis in its joint venture investments is approximately $ 1,000,000 more than statement basis.

The Partnership’s Federal tax basis in its joint venture investments is approximately $ 1,000,000 less than statement basis.

State taxable income may be significantly different due to different tax treatments for certain items.

6 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 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.

As of March 31, 2026, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2022 forward.

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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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, 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.

At March 31, 2026, the balance on this mortgage before unamortized deferred financing costs is $ 125,000,000 .

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.

12 unchanged sentences

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

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

At March 31, 2026, 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;

4 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.

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

At March 31, 2026, 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 September 30, 2025, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

At March 31, 2026, 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 September 30, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $ 8,057,000 .

At March 31, 2026, the balance of this mortgage before unamortized deferred financing costs is approximately $ 7,930,000 .

This investment is referred to as 345 Franklin, LLC.

Summary financial information at September 30, 2025

Summary financial information at March 31, 2026

Rental Properties

27 unchanged sentences

Total units/condominiums

Financial information for the nine months ended September 30, 2025

Rental Income

Laundry and Sundry Income

Administrative

Depreciation and Amortization

Management Fees

Repairs and Maintenance

Taxes and Insurance

Income Before Other Income

Other Income (Loss)

Interest Expense

( 3,851,742 )

( 5,793,142 )

Interest Income

( 3,728,747 )

( 5,615,903 )

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income —NERA 40 %

Financial information for the three months ended September 30, 2025

Financial information for the three months ended March 31, 2026

Rental Income

16 unchanged sentences

Net Income —NERA 40 %

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

unamortized deferred financing costs

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

Future annual mortgage maturities at March 31, 2026 are as follows:

At March 31, 2026, 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 September 30, 2024

unamortized deferred financing costs

Summary financial information at March 31, 2025

Rental Properties

24 unchanged sentences

( 30,646,583 )

( 29,751,455 )

Total Investment in Unconsolidated Joint Ventures (Net)

1 unchanged sentence

Total units/condominiums

Financial information for the nine months ended September 30, 2024

Rental Income

Laundry and Sundry Income

Administrative

Depreciation and Amortization

Management Fees

Repairs and Maintenance

Taxes and Insurance

Income Before Other Income

Other Income (Loss)

Interest Expense

( 3,859,011 )

( 5,517,281 )

Interest Income

Other income (Expense)

( 3,781,684 )

( 5,303,296 )

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income —NERA 40 %

Financial information for the three months ended September 30, 2024

Financial information for the three months ended March 31, 2025

Rental Income

11 unchanged sentences

Interest income

Other income (Expense)

( 1,234,272 )

( 1,855,373 )

Net (Loss) Income

Net (Loss) Income —NERA 50 %

Net Income (Loss)

Net Income (Loss)—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 nine months ended September 30, 2025 was $ 48,000 .

Total expense recognized by the Partnership for the 401(k) Plan for the three months ended March 31, 2026 was $ 19,000 .

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

2 unchanged sentences

The Partnership is currently evaluating the impact of the new rules on its disclosures.

In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules that will require certain climate-related information in registration statements and annual reports.

In April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges.

The new rules include a requirement to disclose material climate-related risks, descriptions of board and management oversight and risk management activities, the material impacts of these risks on a registrant’s strategy, business model and outlook, and any material climate-related targets or goals, as well as material effects and costs of severe weather events and other natural conditions and greenhouse gas emissions.

Prior to the stay of the new rules, they would have been effective for annual periods beginning January 1, 2025, except for the greenhouse gas emissions disclosures, which would have been effective for annual periods beginning January 1, 2026.

The Partnership is currently evaluating the impact of the new rules on its disclosures.

SEGMENT REPORTING

13 unchanged sentences

SUBSEQUENT EVENTS

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.

On May 7, 2026, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on June 30, 2026.

From April 1, 2026 through May 8, 2026, the Partnership has purchased 813 Depository Receipts .

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