What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-08 compared with 2021-08-06 · 87 added, 87 removed, 246 unchanged (41% of the section changed)

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Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management’s good faith belief when those statements are made, and are based on information currently available to management.

Caution should be exercised in interpreting and relying on such forward looking statements, the realization of which may be impacted by known and unknown risks and uncertainties, events that may occur subsequent to the forward looking statements, and other factors which may be beyond the Partnership’s control and which can materially affect the Partnership’s actual

results, performance or achievements for 2021 and beyond.

Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.

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With the introduction and roll out of Covid vaccines in the spring of 2021, the economy is opening back up.

The Governor of Massachusetts rescinded the State’s Covid-19 restrictions on May 29 th and terminated the State of Emergency on June 15 th .

The local colleges and universities announced a return to campus in the fall of 2021 and the rental market improved significantly as students prepare to return to the area.

Vacancy rates for the Partnership’s residential properties as of August 1, 2021 were 3.3% as compared with a vacancy rate of 6.3% as of August 1, 2020.

The vacancy rate for the Joint Venture properties as of August 1, 2021 is 2.8%, as compared to 3.9% for the same period last year.

The Governor of Massachusetts rescinded the State’s Covid-19 restrictions on May 29 and terminated the State of Emergency on June 15.

The local colleges and universities returned to campus in September 2021 and the rental market improved significantly as students returned to the area.

Vacancy rates for the Partnership’s residential properties as of November 1, 2021 were 2.5% as compared with a vacancy rate of 8.3% as of November 1, 2020.

The vacancy rate for the Joint Venture properties as of November 1, 2021 was 2.8%, as compared to 22.8% for the same period last year.

The current vacancy rates are in line with those experienced prior to the Pandemic.

Residential tenants generally have lease terms of 12 months.

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Rental activity has been strong as we moved from spring to summer and all indications are that we will have low vacancy rates for the balance of the year.

However, with the uncertainty that exists with the new variants of the Covid-19 virus, we are unable to project the financial performance of the portfolio.

During the second quarter of 2021, rents increased on average of 1.2% for renewals and decreased on average of 4.0% for new leases.

For the balance of 2021, due to the ongoing global coronavirus pandemic, management expects a significant softening of the local real estate market and is experiencing a decrease in rent and continuing rent concessions.

For the second quarter of 2021, consolidated revenue decreased by 2.0%, operating expenses decreased by 0.5% and Income before Other Income (Expense) decreased by 5.8%.

For the same reporting period, vacancy was 3.3% in 2021 vs 6.3% in 2020.

During the covid crisis, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants.

Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe.

Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services.

Leasing is limited to unoccupied units unless permission is granted by the current tenant and a web based video technology is being used to remotely show apartments.

Hamilton and the Partnership will continue to adjust their s business practices to comply with Federal and State mandates for workplace and rental property operations.

During the third quarter of 2021, rents increased on average of 2.7% for renewals and increased on average of 1.3% for new leases.

For the balance of 2021, management expects some softening of the local real estate market as we move into the slower winter rental season.

For the third quarter of 2021, consolidated revenue increased by 5.3%, operating expenses increased by 4.0% and Income before Other Income (Expense) increased by 10.0%, as compared to the third quarter of 2020.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.

The term of the line was for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%.

The agreement originally expired on July 31, 2017, and was

extended until October 31, 2020.

The agreement originally expired on July 31, 2017, and was extended until October 31, 2020.

The costs associated with the line of credit extension in 2017 were approximately $128,000.

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The Partnership paid an extension fee of approximately $37,500 in association with the extension.

Management has a signed term sheet with the lender and is working to close on a three year extension and modification of the line of credit in August 2021.

Subsequent Events for details.

On October 29, 2021, the Partnership closed a three year extension until October 29, 2024.

See Note 17 to the consolidated financial statements, Subsequent Events, for details.

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates (“KeyBank”) in the principal amount of $6,175,000.

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From the start of the Stock Repurchase Program in 2007 through March 31, 2021, the Partnership has purchased 1,428,437 Depositary Receipts.

During the three months ended June 30, 2021, the Partnership did not purchase any Depositary Receipts.

During the three months ended September 30, 2021, the Partnership did not purchase any Depositary Receipts.

In March of 2020, the Board of Advisors and Board of Directors unanimously approved an extension of the Repurchase Program until March 31, 2025.

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

At August 1, 2021, the Harold Brown related entities and Ronald Brown collectively own approximately 30.9% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members).

The Estate of Harold Brown also controls 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, Inc.

With the recovery of the residential rental market, the Partnership expects to resume the purchase of depository receipts in the fourth quarter of 2021.

At November 1, 2021, the Harold Brown related entities and Ronald Brown collectively own approximately 30.9% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members).

Harold Brown related entities also control 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, Inc.

(“NewReal”), the Partnership’s sole general partner.

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is controlled by Jameson Brown and Harley Brown.

The 75% of the issued and outstanding capital stock of NewReal,by the Estate of Harold Brown, is owned by the Harold Brown 2013 Revocable Trust (the “2013 Trust”), an entity of which Sally Michaels and David Reier are the trustees.

As reported on Form 8-K dated October 1, 2021, Robert Somma, a trustee of the 2013 Trust, passed away.

Reier replaced him as trustee of the 2013 Trust.

Reier was elected on November 5, 2021 as a director of New Real, Inc.

In addition to the Management Fee, the Partnership Agreement further provides for the employment of outside professionals to provide services to the Partnership and allows NewReal to charge the Partnership for the cost of employing professionals to assist with the administration of the Partnership’s properties.

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Residential tenants sign a one year lease.

During the six months ended June 30, 2021, tenant renewals were approximately 67% with an average rental increase of approximately 1.0%, new leases accounted for approximately 33% with rental rate decreases of approximately 4.4%.

During the six months ended June 30, 2021, leasing commissions were approximately $308,000 compared to approximately $159,000 for the six months ended June 30, 2020, an increase of approximately $149,000 (94.2%).

Tenant concessions were approximately $15,000 for the six months ended June 30, 2021, compared to approximately $18,000 for the six months ended June 30, 2020, a decrease of approximately $3,000 (15.7%).

Tenant improvements were approximately $746,000 for the six months ended June 30, 2021, compared to approximately $897,000 for the six months ended June 30, 2020, a decrease of approximately $151,000 (16.8%).

Hamilton accounted for approximately 2.5% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2021 and 2.5 % during the six months ended June 30, 2020.

During the nine months ended September 30, 2021, tenant renewals were approximately 67% with an average rental increase of approximately 1.9%, new leases accounted for approximately 33% with rental rate decreases of approximately 1.2%.

During the nine months ended September 30, 2021, leasing commissions were approximately $642,000 compared to approximately $372,000 for the nine months ended September 30, 2020, an increase of approximately $270,000 (72.6%).

Tenant concessions were approximately $34,000 for the nine months ended September 30, 2021, compared to approximately $25,000 for the nine months ended September 30, 2020, an increase of approximately $9,000 (36.0%).

Tenant improvements were approximately $1,282,000 for the nine months ended September 30, 2021, compared to approximately $1,320,000 for the nine months ended September 30, 2020, a decrease of approximately $38,000 (2.9%).

Hamilton accounted for approximately 2.4% of the repair and maintenance expenses paid for by the Partnership during the nine months ended September 30, 2021 and 2.2 % during the nine months ended September 30, 2020.

Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters.

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Additionally, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions.

Overall, Hamilton provided approximately $59,000 (67.5%) and approximately $64,000 (65.9%) of the legal services paid for by the Partnership during the six months ended June 30, 2021 and 2020 respectively.

Overall, Hamilton provided approximately $83,000 (60.5%) and approximately $84,000 (64.3%) of the legal services paid for by the Partnership during the nine months ended September 30, 2021 and 2020 respectively.

Additionally, as described in Note 3 to the consolidated financial statements, The Hamilton Company receives similar fees from the Investment Properties.

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Hamilton’s architectural department also provides services to the Partnership on an as-needed basis.

During the six months ended June 30, 2021, Hamilton provided the Partnership approximately $302,000 in construction and architectural services, compared to approximately $305,000 for the six months ended June 30, 2020.

During the nine months ended September 30, 2021, Hamilton provided the Partnership approximately $413,000 in construction and architectural services, compared to approximately $493,000 for the nine months ended September 30, 2020.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership.

During the six months ended June 30, 2021 and 2020, Hamilton charged the Partnership $62,500 for bookkeeping and accounting services.

During the nine months ended September 30, 2021 and 2020, Hamilton charged the Partnership $93,750 for bookkeeping and accounting services.

For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

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Rental concessions are also accounted for on the straight-line basis.

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

for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases .

The capitalized above-market lease amounts are accounted for as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

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The Partnership elected an allowed practical expedient.

For (i) operating lease arrangements involving real estate that include

common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income.

For (i) operating lease arrangements involving real estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income.

We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred.

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The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property.

As these factors are difficult to predict and are subject to future events that may alter

management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

Investments in Joint Ventures:

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2021 and June 30, 2020

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,187,000 during the three months ended June 30, 2021, compared to approximately $4,444,000 for the three months ended June 30, 2020, a decrease of approximately $257,000 (5.8%).

Three Months Ended September 30, 2021 and September 30, 2020

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $3,551,000 during the three months ended September 30, 2021, compared to approximately $3,228,000 for the three months ended September 30, 2020, an increase of approximately $323,000 (10.0%).

The rental activity is summarized as follows:

Occupancy Date

August 1, 2021

August 1, 2020

November 1, 2021

November 1, 2020

Total square feet

Rental Income (in thousands)

Three Months Ended June 30,

Three Months Ended September 30,

Residential percentage

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Contingent rentals

Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020:

Three Months Ended June 30,

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020:

Three Months Ended September 30,

Rental income

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Interest expense

Income from investments in unconsolidated joint ventures

Rental income for the three months ended June 30, 2021 was approximately $15,333,000, compared to approximately $15,647,000 for the three months ended June 30, 2020, a decrease of approximately $314,000 (2.0%).

Income (Loss) from investments in unconsolidated joint ventures

Net Income (Loss)

Rental income for the three months ended September 30, 2021 was approximately $15,832,000, compared to approximately $15,046,000 for the three months ended September 30, 2020, an increase of approximately $786,000 (5.2%).

Although rental income has increased at a number of properties, due to the effect of the Pandemic, a number of properties incurred a decrease in their rental income.

The Partnership properties with the largest increases in rental income include Hamilton Oaks, Hamilton Green and Hamilton Cypress with increases of $33,000, $32,000, and $24,000 respectively.

These are offset by certain properties with the largest decreases in rental income, which include 62 Boylston, 1144 Commonwealth, and Lincoln Street, with decreases of approximately $610,000, 168,000, and $60,000, respectively.

The Partnership properties with the largest increases in rental income include Hamilton Green, Mill Street and Hamilton Oaks with increases of $102,000, $48,000, and $40,000 respectively.

These are offset by certain properties with the largest decreases in rental income, which include 62 Boylston, Woodland Park, and1144 Commonwealth, with decreases of approximately $83,000, $64,000, and $46,000, respectively.

Included in rental income is contingent rentals collected on commercial properties.

Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses for the three months ended June 30, 2021 were approximately $11,260,000 compared to approximately $11,315,000 for the three months ended June 30, 2020, a decrease of approximately $55,000 (0.5%).

The factors contributing to the decrease are a decrease in depreciation and amortization of approximately $658,000 (14.3%), partially offset by an increase in repairs and maintenance of approximately $285,000 (13.9%), an increase in operating costs of approximately $116,000 ( 9.0%) and an increase in renting expense of approximately $93,000 (72.1%).

Interest expense for the three months ended June 30, 2021 was approximately $3,379,000 compared to approximately $3,424,000 for the three months ended June 30, 2020, a decrease of approximately $45,000 (1.3%).

At June 30, 2021, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

Operating expenses for the three months ended September 30, 2021 were approximately $12,395,000 compared to approximately $11,915,000 for the three months ended September 30, 2020, an increase of approximately $480,000 (4.0%).

The factors contributing to the increase are an increase in repairs and maintenance of approximately $604,000 (23.9%), an increase in taxes and insurance of approximately $153,000 (7.2%), and an increase in renting expense of approximately $126,000 (37.9%), partially offset by a decrease in depreciation and amortization of approximately $656,000 (14.2%) due to fully depreciated assets.

Interest expense for the three months ended September 30, 2021 was approximately $3,393,000 compared to approximately $3,417,000 for the three months ended September 30, 2020, a decrease of approximately $24,000 (0.7%).

At September 30, 2021, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $238,000 for the three months ended June 30, 2021, compared to the net income of approximately $444,000 for the three months ended June 30, 2020, a decrease in income of approximately $682,000 (153.7%).

This decrease is primarily due to the reduction in rental revenue from approximately $ 2,617,000 to $2,142,000, a decrease of approximately $475,000 (18.2 %) for the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Included in the income for the three months ended June 30, 2021 is depreciation and amortization expense of approximately $656,000.

As a result of the changes discussed above, the net income for the three months ended June 30, 2021 was approximately $570,000 compared to net income of approximately $1,465,000 for the three months ended June 30, 2020, a decrease in income of approximately $895,000 (61.1 %).

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $7,582,000 during the six months ended June 30, 2021, compared to approximately $8,789,000 for the six months ended June 30, 2020, a decrease of approximately $1,207,000 (13.7%).

Six Months Ended June 30,

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $233,000 for the three months ended September 30, 2021, compared to a net loss of approximately $249,000 for the three months ended September 30, 2020, an increase in income of approximately $16,000 (6.6%).

This increase is primarily due to an increase in rental revenue to approximately $2,329,000 from $2,193,000, an increase of approximately $136,000 (6.2 %) for the three months ended September 30,

2021 compared to the three months ended September 30, 2020.

Included in the income for the three months ended September 30, 2021 is depreciation and amortization expense of approximately $660,000.

As a result of the changes discussed above, the net loss for the three months ended September 30, 2021 was approximately $75,000 compared to the net loss of approximately $439,000 for the three months ended September 30, 2020, an increase in income of approximately $364,000 (82.8%).

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $11,134,000 during the nine months ended September 30, 2021, compared to approximately $12,017,000 for the nine months ended September 30, 2020, a decrease of approximately $883,000 (7.3%).

Nine Months Ended September 30,

Rental income

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Interest (expense)

(Loss) from investments in unconsolidated joint ventures

Rental income for the six months ended June 30, 2021 was approximately $30,313,000, compared to approximately $31,900,000 for the six months ended June 30, 2020, a decrease of approximately $1,587,000 (5.0%).

Although rental income has increased at a number of properties, due to the effect of the Pandemic, a number of properties incurred a decrease in their rental income.The Partnership properties with the largest increases in rental income include Hamilton Oaks, Hamilton Green and Dean Street Associates with increases of $92,000, $59,000, and $44,000 respectively.

Income (Loss) from investments in unconsolidated joint ventures

Rental income for the nine months ended September 30, 2021 was approximately $46,146,000, compared to approximately $46,947,000 for the nine months ended September 30, 2020, a decrease of approximately $801,000 (1.7%).

Although rental income has increased at a number of properties, due to the effect of the Pandemic, a number of properties incurred a decrease in their rental income.

The Partnership properties with the largest increases in rental income include Hamilton Green, Hamilton Oaks and Dean Street Associates with increases of $161,000, $133,000, and $57,000 respectively.

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Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses for the six months ended June 30, 2021 were approximately $22,953,000 compared to approximately $23,345,000 for the six months ended June 30, 2020, a decrease of approximately $392,000 (1.7%).

The factors contributing to this net decrease are a decrease in depreciation and amortization of approximately $ 1,318,000 (14.4%) due to fully depreciated assets, partially offset by an increase in operating costs of approximately $493,000 (16.7%), an increase in repairs and maintenance expenses of approximately $169,000 (4.1%), and an increase in renting expense of approximately $158,000 (48.5%).

Interest expense for the six months ended June 30, 2021 was approximately $6,743,000 compared to approximately $6,874,000 for the six months ended June 30, 2020, a decrease of approximately $131,000 (1.9%).

Operating expenses for the nine months ended September 30, 2021 were approximately $35,349,000 compared to approximately $35,260,000 for the nine months ended September 30, 2020, an increase of approximately $89,000 (0.3%).

The factors contributing to this net increase are an increase in repairs and maintenance expenses of approximately $773,000 (11.6%), an increase in operating costs of approximately $603,000 (14.4%), and an increase in

renting expense of approximately $284,000 (43.1%), partially offset by a decrease in depreciation and amortization of approximately $1,973,000 (14.3%), due to fully depreciated assets.

Interest expense for the nine months ended September 30, 2021 was approximately $10,136,000 compared to approximately $10,291,000 for the nine months ended September 30, 2020, a decrease of approximately $155,000 (1.5%).

The decrease is primarily due to a decrease in interest expense on the line of credit of approximately $83,000.

At June 30, 2021, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

At September 30, 2021, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $564,000 for the six months ended June 30, 2021, compared to net income of approximately $919,000 for the six months ended June 30, 2020, a decrease in income of approximately $1,482,000 (161.4%).

This decrease is primarily due to the reduction in rental revenue from approximately $ 5,372,000 for the six months ended June 30, 2020 to approximately $4,215,000 for the six months ended June 30, 2021, a decrease of approximately $1,157,000 (21.5 %).

Included in the income for the six months ended June 30, 2021 is depreciation and amortization expense of approximately $1,308,000.

The proportional loss for the six months ended June 30, 2021 from the investment in Dexter Park is approximately $459,000.

As a result of the changes discussed above, net income for the six months ended June 30, 2021 was approximately $276,000 compared to income of approximately $2,834,000 for the six months ended June 30, 2020, a decrease in net income of approximately $2,558,000 (90.3%).

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $797,000 for the nine months ended September 30, 2021, compared to net income of approximately $669,000 for the nine months ended September 30, 2020, a decrease in income of approximately $1,466,000 (219.1%).

This decrease is primarily due to the reduction in rental revenue from approximately $7,565,000 for the nine months ended September 30, 2020 to approximately $6,543,000 for the nine months ended September 30, 2021, a decrease of approximately $1,022,000 (13.5 %).

Included in the income for the nine months ended September 30, 2021 is depreciation and amortization expense of approximately $1,968,000.

As a result of the changes discussed above, net income for the nine months ended September 30, 2021 was approximately $200,000 compared to income of approximately $2,394,000 for the nine months ended September 30, 2020, a decrease in net income of approximately $2,194,000 (91.6%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six months of 2021 was the collection of rents.

The Partnership’s principal source of cash during the first six months of 2020 was the collection of rents and the proceeds from the refinancing of Brookside Apartments.

The majority of cash and cash equivalents of $23,367,387 at June 30, 2021 and $18,646,972 at December 31, 2020 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $4,720,415 for the six months ended June 30, 2021 is summarized as follows:

Six Months Ended June 30,

The Partnership’s principal source of cash during the first nine months of 2021 was the collection of rents.

The Partnership’s principal source of cash during the first nine months of 2020 was the collection of rents and the proceeds from the refinancing of Brookside Apartments.

The majority of cash and cash equivalents of $24,616,257 at September 30, 2021 and $18,646,972 at December 31, 2020 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $5,969,285 for the nine months ended September 30, 2021 is summarized as follows:

Nine Months Ended September 30,

Cash provided by operating activities

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Net increase in cash and cash equivalents

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

The change in cash provided by operating activities is due to various factors, including a change in depreciation expense, a change in income and distribution from joint ventures, and other factors.

The increase in cash used in investing activities is primarily due to improvements to rental properties.

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Cash reserves have been adequate to fully fund improvements.

The most significant improvements were made at 62 Boylston Street, Hamilton Oaks, Redwood Hills, Dean Street Associates, Hamilton Green and 1144 Commonwealth, at a cost of approximately $355,000, 145,000, $123,000, $95,000, $95,000 and $84,000 respectively.

The most significant improvements were made at 62 Boylston Street, Redwood Hills, Hamilton Green, Hamilton Oaks, Westgate, and Dean Street Associates, at a cost of approximately $439,000, $233,000, $210,000, $184,000, $151,000 and $127,000 respectively.

On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000.

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In connection with this refinancing, there were closing costs of approximately $136,000.

During the six months ended June 30, 2021, the Partnership received distributions of approximately $419,000 from the investment properties.

For the six months ended June 30, 2020, the Partnership received $1,066,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $80,000 and $700,000 for the six months ended June 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021, the Partnership received distributions of approximately $590,000 from the investment properties.

For the nine months ended September 30, 2020, the Partnership received $1,195,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $80,000 and $700,000 for the nine months ended September 30, 2021 and 2020, respectively.

In January 2021, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2021.

In April 2021, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on June 30, 2021.

In July 2021, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), payable on September 30, 2021.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.

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The Partnership paid an extension fee of approximately $37,500 in association with the extension.

Management has a signed term sheet with the lender and is working to close on a three year extension and modification of the line of credit in August 2021.

The Partnership agreed to terms with the lender on October 29, 2021, to extend the line of credit until October 29, 2024.

The Partnership is in compliance with the loan covenants under the terms of loan extension and modification.

Subsequent Events for details.

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On January 22, 2020, the Partnership paid down the line by $1,000,000.

As of June 30, 2021, the line of credit had an outstanding balance of $17,000,000.

As of September 30, 2021, the line of credit had an outstanding balance of $17,000,000.

The Partnership anticipates that cash from operations will be sufficient to fund its current operations, pay distributions, make required debt payments and finance current improvements to its properties.

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Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of June 30, 2021 the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

As of September 30, 2021, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

We do not have control of these partnerships and therefore we account for them using the equity method of consolidation.

At June 30, 2021, our proportionate share of the non-recourse debt related to these investments was approximately $70,972,000.

At September 30, 2021, our proportionate share of the non-recourse debt related to these investments was approximately $70,945,000.

See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

As of June 30, 2021, we are subject to contractual payment obligations as described in the table below.

As of September 30, 2021, we are subject to contractual payment obligations as described in the table below.

Payments due by period

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Factors That May Affect Future Results

Along with risks detailed in Item 1A and from time to time in the Partnership’s filings with the Securities and Exchange Commission, some factors that could cause the Partnership’s actual results, performance or achievements to differ materially from those expressed or implied by forward looking statements include but are not limited to the following:

Along with risks detailed in Item 1A of the Partnership’s Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on March 12, 2021 and from time to time in the Partnership’s other filings with the Securities and Exchange Commission, some factors that could cause the Partnership’s actual results, performance or achievements to differ materially from those expressed or implied by forward looking statements include but are not limited to the following:

● The Partnership depends on the real estate markets where its properties are located, primarily in Eastern Massachusetts, and these markets may be adversely affected by local economic market conditions, which are beyond the Partnership’s control.

29 unchanged sentences

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 2. Management’s Discussion and Analysis