What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2023-01-19 · 72 added, 125 removed, 215 unchanged (48% of the section changed)

6 unchanged sentences

We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise.

Accordingly, investors should use caution in relying

on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Over the last several months, the Partnership took advantage of the low interest rate environment and refinanced fifteen properties, increased their loan balances, and raised approximately $130,000,000.

Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Over a period of time both in 2021 and 2022, the Partnership took advantage of the low interest rate environment and refinanced fifteen properties, increased their loan balances, and raised approximately $130,000,000.

With interest rates rising, and a threat of an economic slowdown, the Partnership increased the debt level and built cash reserves to acquire additional properties when opportunities become available.

3 unchanged sentences

The Partnership will consider refinancing existing properties if the Partnership’s cash reserves are insufficient to repay existing mortgages or if the Partnership needs additional funds for future acquisitions.

More than two years has passed since we became aware of the outbreak of COVID- 19, The World Health Organization declared a global pandemic on March 11, 2020.

On March 10, 2020 the Governor of Massachusetts declared a state of emergency and ordered all non-essential businesses closed.

Additionally, March of 2020 saw the closure of local colleges and universities for the balance of the academic year.

Colleges in the City of Boston and the surrounding communities conducted classes in the 2020/2021 academic year remotely, or using a hybrid model of remote and limited in class learning.

These educational models caused a large decrease in the student population and resulted in significant vacancies in the Partnership’s apartment portfolio.

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

The Governor of Massachusetts rescinded the State’s COVID-19 restrictions on May 29, 2021 and terminated the State of Emergency on June 15, 2021.

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

On February 24, 2022, Russia began an invasion into Ukraine.

In response, nations from around the world have placed sanctions on Russia in an attempt to cripple its economy.

There is no way to predict how this conflict and the Russian sanctions will affect both the global and local economies.

If there is a downturn in the economy and significant inflation to the cost of energy, goods and service, there may be material adverse effects to our business, results of operations, cash flows, and financial condition.

The vacancy rate for the Partnership’s residential properties as of November 1, 2022 was 1.8% as compared with a vacancy rate of 2.5% as of November 1, 2021.

The vacancy rate for the Joint Venture properties as of November 1, 2022 was 0.9%, as compared to 2.8% for the same period last year.

The vacancy rate for the Partnership’s residential properties as of May 1, 2023 was 2.1% as compared with a vacancy rate of 2.0% as of May 1, 2022.

The vacancy rate for the Joint Venture properties as of May 1, 2023 was 2.5 %, as compared to 0.6% for the same period last year.

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

1 unchanged sentence

The majority of these leases will mature during the second and third quarters of the year.

During the third quarter of 2022, rents increased on average of 6.7% for renewals and increased on average of 18.2% for new leases.

During the first quarter of 2023, rents increased on average of 6.3% for renewals and increased on average of 10.4% for new leases.

For the balance of 2023, management expects a strong rental market with continued rent growth.

For the third quarter of 2022, consolidated revenue increased by 7.2%, operating expenses increased by 1.0 % and Income before Other Income (Expense) increased by 28.4%, as compared to the third quarter of 2021.

For the first quarter of 2023, consolidated revenue increased by 6.7%, operating expenses increased by 3.4 % and Income before Other Income (Expense) increased by 17.9%, as compared to the first quarter of 2022.

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

7 unchanged sentences

The commitment amount is for $25 million but is restricted to $17 million during the modification period.

The modification period covers the current period and phases out by December 31, 2022.

During this period, the loan covenants are modified from a minimum consolidated debt service ratio of 1.60 to a ratio of 1.35 until September 30, 2022;

The modification period was phased out by December 31, 2022.

During the modification period, the loan covenants were modified from a minimum consolidated debt service ratio of 1.60 to a

ratio of 1.35 until September 30, 2022;

from a minimum tangible net worth requirement of $200 million to a net worth of $175 million until September 30, 2022;

1 unchanged sentence

Once the financial performance of the Partnership meets the original covenant tests for the trailing 12-month period, the commitment amount will return to $25 million.

The portfolio’s debt yield fell below the minimum of 8.5% to 8.05%.

As of September 30, 2022, the Partnership did not comply with the debt yield financial covenant.

As of March 31, 2023, the portfolio’s debt yield fell below the minimum of 9.5% to 8.5%, thus the Partnership did not comply with the debt yield financial covenant.

As such, the Partnership is unable to draw down any amount from the line of credit until the Partnership meets the required financial covenants.

From the start of the Stock Repurchase Program in 2007 through September 30, 2022, the Partnership has purchased 1,486,802 Depositary Receipts.

During the nine months ended September 30, 2022, the Partnership purchased a total of 52,613 Depositary Receipts.

At November 1, 2022, the Harold Brown related entities and Ronald Brown collectively own approximately 31.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members).

From the start of the Stock Repurchase Program in 2007 through March 31, 2023, the Partnership has purchased 1,498,809 Depositary Receipts.

During the three months ended March 31, 2023, the Partnership purchased a total of 10,349 Depositary Receipts.

At May 1, 2023, the Harold Brown related entities and Ronald Brown collectively own approximately 31.8% 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.

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Residential tenants sign a one year lease.

During the nine months ended September 30, 2022, tenant renewals were approximately 68% with an average rental increase of approximately 6.2%, new leases accounted for approximately 32% with rental rate increases of approximately 16.1%.

During the nine months ended September 30, 2022, leasing commissions were approximately $264,000 compared to approximately $642,000 for the nine months ended September 30, 2021, a decrease of approximately $378,000 (59.0%).

Tenant concessions were approximately $39,000 for the nine months ended September 30, 2022, compared to approximately $34,000 for the nine months ended September 30, 2021, an increase of approximately $5,000 (14.7%).

Tenant improvements were approximately $1,723,000 for the nine months ended September 30, 2022, compared to approximately $1,282,000 for the nine months ended September 30, 2021, an increase of approximately $441,000 (34.4%).

Hamilton accounted for approximately 2.6% of the repair and maintenance expenses paid for by the Partnership during the nine months ended September 30, 2022 and 2.4 % during the nine months ended September 30, 2021.

During the three months ended March 31, 2023, tenant renewals were approximately 85% with an average rental increase of approximately 6.3%, new leases accounted for approximately 15% with rental rate increases of approximately 10.4%.

During the three months ended March 31, 2023, leasing commissions were approximately $59,000 compared to approximately $81,000 for the three months ended March 31, 2022, a decrease of approximately $22,000 (27.9%).

Tenant concessions were approximately $20,000 for the three months ended March 31, 2023, compared to approximately $11,000 for the three months ended March 31, 2022, an increase of approximately $9,000 (81.8%).

Tenant improvements were approximately $650,000 for the three months ended March 31, 2023, compared to approximately $475,000 for the three months ended March 31, 2022, an increase of approximately $175,000 (36.8%).

Hamilton accounted for approximately 1.7% of the repair and maintenance expenses paid for by the Partnership during the three months ended March 31, 2023 and 3.2 % during the three months ended March 31, 2022.

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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Hamilton’s legal department handles most of the Partnership’s eviction and collection matters.

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

transactions.

Overall, Hamilton provided approximately $162,000 (72.0%) and approximately $83,000 (60.5%) of the legal services paid for by the Partnership during the nine months ended September 30, 2022 and 2021 respectively.

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

Overall, Hamilton provided approximately $68,000 (82.6%) and approximately $54,000 (84.1%) of the legal services paid for by the Partnership during the three months ended March 31, 2023 and 2022 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 nine months ended September 30, 2022, Hamilton provided the Partnership approximately $89,000 in construction and architectural services, compared to approximately $413,000 for the nine months ended September 30, 2021.

During the three months ended March 31, 2023, Hamilton provided the Partnership approximately $288,000 in construction and architectural services, compared to approximately $37,000 for the three months ended March 31, 2022.

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

During the nine months ended September 30, 2022 and 2021, Hamilton charged the Partnership $93,750 for bookkeeping and accounting services.

During the three months ended March 31, 2023 and 2022, Hamilton charged the Partnership $31,250 for bookkeeping and accounting services.

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

21 unchanged sentences

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.

1 unchanged sentence

When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets.

The Partnership generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale.

The Partnership

generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale.

If, in management’s opinion, the estimated net sales price, net of selling costs, of the assets which have been identified as held for sale is less than the carrying value of the assets, a valuation allowance is established.

13 unchanged sentences

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

Investments in Treasury Bills:

Investments in Treasury Bills are recorded 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 Treasury Bills are 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.

Intangible assets acquired include amounts for in-place lease values above and below market leases and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant.

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To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property.

The Partnership’s estimates of aggregate future cash

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

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

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

Investments in Treasury Bills:

Investments in Treasury Bills are recorded 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

Treasury Bills are 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.

Investments in Joint Ventures:

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RESULTS OF OPERATIONS

Three Months Ended September 30, 2022 and September 30, 2021

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,561,000 during the three months ended September 30, 2022, compared to approximately $3,551,000 for the three months ended September 30, 2021, an increase of approximately $1,010,000 (28.4%).

Three Months Ended March 31, 2023 and March 31, 2022

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,451,000 during the three months ended March 31, 2023, compared to approximately $3,777,000 for the three months ended March 31, 2022, an increase of approximately $674,000 (17.9%).

The rental activity is summarized as follows:

Occupancy Date

November 1, 2022

November 1, 2021

Total square feet

Rental Income (in thousands)

Three Months Ended September 30,

Three Months Ended March 31,

Residential percentage

1 unchanged sentence

Contingent rentals

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021:

Three Months Ended September 30,

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022:

Three Months Ended March 31,

Rental income

10 unchanged sentences

Income from investments in unconsolidated joint ventures

Other Income (Expense)

Rental income for the three months ended September 30, 2022 was approximately $16,974,000, compared to approximately $15,832,000 for the three months ended September 30, 2021, an increase of approximately $1,142,000 (7.2%).

The Partnership properties with the largest increases in rental income include 62 Boylston, 1144 Commonwealth, Westgate Apartments, Hamilton Green, and Mill Street Gardens with increases of $455,000, $213,000, $101,000, $89,000 and $84,000 respectively.

Net Income (Loss)

Rental income for the three months ended March 31, 2023 was approximately $17,569,000, compared to approximately $16,460,000 for the three months ended March 31, 2022, an increase of approximately $1,109,000 (6.7%).

The Partnership properties with the largest increases in rental income include 62 Boylston, 1144 Commonwealth, 653 Worcester Road, Westgate Apartments, and Clovelly Apartments with increases of $362,000, $185,000, $147,000, $129,000 and $69,000 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 September 30, 2022 were approximately $12,517,000 compared to approximately $12,395,000 for the three months ended September 30, 2021, an increase of approximately $122,000 (1.0%), The factors contributing to the increase are an increase in depreciation and amortization of approximately $158,000 (4.0%), an increase in administrative expenses of approximately $89,000 (14.7%), and an increase in operating costs of approximately $72,000 (5.4%), partially offset by a decrease in renting expenses of approximately $276,000 (60.4%).

Interest expense for the three months ended September 30, 2022 was approximately $3,982,000 compared to approximately $3,393,000 for the three months ended September 30, 2021, an increase of approximately $589,000 (17.4 %).

Excluding the increase in expenses at 653 Worcester Road of approximately $311,000, operating expenses increased approximately $126,000 (1.0%).

Operating expenses for the three months ended March 31, 2023 were approximately $13,240,000 compared to approximately $12,803,000 for the three months ended March 30, 2022, an increase of approximately $437,000 (3.4%), The factors contributing to the increase are an increase in repairs and maintenance of approximately $483,000 (21.2%), an increase in taxes and insurance of approximately $194,000 (8.5%), partially offset by a decrease in depreciation and amortization expenses of approximately $175,000 (4.3%) due to fully depreciated assets, and a decrease in operating expenses of approximately $142,000 (5.3%).

Interest expense for the three months ended March 31, 2023 was approximately $3,899,000 compared to approximately $3,455,000 for the three months ended March 31, 2022, an increase of approximately $444,000 (12.9 %).

The increase is due to the refinancing of properties, increasing the amount of the debt, which increased the interest expense for the period.

Interest income for the three months ended September 30, 2022 was approximately $363,000 compared to approximately $0 for the three months ended September 30, 2021, an increase of approximately $363,000.

The increase is due to investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 2.1% to 3.9%.

At September 30, 2022, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

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

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $93,000 for the three months ended September 30, 2022, compared to a net loss of approximately $233,000 for the three months ended September 30, 2021, an increase in income of approximately $326,000 (140.1%).

This increase is primarily due to an increase in rental revenue to approximately $2,625,000 from $2,329,000, an increase of approximately $296,000 (12.7 %) for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Included in the income for the three months ended September 30, 2022 is depreciation and amortization expense of approximately $662,000.

As a result of the changes discussed above, net income for the three months ended September 30, 2022 was approximately $995,000 compared to a net loss of approximately $75,000 for the three months ended September 30, 2021, an increase in income of approximately $1,070,000 (1,420.3%).

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $12,949,000 during the nine months ended September 30, 2022, compared to approximately $11,134,000 for the nine months ended September 30, 2021, an increase of approximately $1,815,000 (16.3%).

Nine Months Ended September 30,

Rental income

Laundry and sundry income

Administrative

Depreciation and amortization

Management fee

Repairs and maintenance

Taxes and insurance

Income Before Other Income ( Expense)

Other Income (Expense)

Interest income

Interest (expense)

Income from investments in unconsolidated joint ventures

Other (Expense) Income

Rental income for the nine months ended September 30, 2022 was approximately $50,260,000, compared to approximately $46,146,000 for the nine months ended September 30, 2021, an increase of approximately $4,114,000 (8.9%).

The Partnership properties with the largest increases in rental income include 62 Boylston, 1144 Commonwealth, Westgate Apartments, Hamilton Green, and Mill Street Gardens, with increases of $1,524,000, $494,000, $282,000, 249,000 and $238,000 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 nine months ended September 30, 2022 were approximately $37,642,000 compared to approximately $35,349,000 for the nine months ended September 30, 2021, an increase of approximately $2,293,000 (6.5%), primarily due to an increase in the refurbishment of apartments, and an increase in snow removal expense during the winter.

The factors contributing to this net increase are an increase in repairs and maintenance expenses of approximately $948,000 (12.8%), an increase in operating expense of approximately $817,000 (17.0%), and an increase in depreciation and amortization of approximately $406,000 (3.4%), partially offset by a decrease in renting expense of approximately $439,000 (46.7%).

Interest income for the nine months ended September 30, 2022 was approximately $363,000 compared to approximately $0 for the three months ended September 30, 2021, an increase of approximately $363,000.

Interest income for the three months ended March 31, 2023 was approximately $975,000 compared to approximately $0 for the three months ended March 31, 2022, an increase of approximately $975,000.

The increase is due to investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.45% to 4.75%.

Interest expense for the nine months ended September 30, 2022 was approximately $11,061,000 compared to approximately $10,137,000 for the nine months ended September 30, 2021, an increase of approximately $924,000 (9.1%).

The increase is due to the refinancing of properties, increasing the amount of debt, which increased the interest expense for the period.

At September 30, 2022, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

At March 31, 2023, 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 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $204,000 for the nine months ended September 30, 2022, compared to a net loss of approximately $797,000 for the nine months ended September 30, 2021, an increase in income of approximately $1,001,000 (125.6%).

This increase is primarily due to an increase in rental revenue of approximately $ 7,526,000 for the nine months ended September 30, 2022 from approximately $6,543,000 for the nine months ended September 30, 2021, an increase of approximately $983,000 (15.0 %).

Included in the income for the nine months ended September 30, 2022 is depreciation and amortization expense of approximately $1,971,000.

On November 30, 2021, the Partnership entered into a Master Credit Facility Agreement (the “Facility Agreement”) with KeyBank National Association (“KeyBank”) dated as of November 30, 2021, with an initial advance in the amount of $156,000,000.

Interest only on the debt at a fixed interest rate of 2.97% is payable on a monthly basis through December 31, 2031.

On June 16, 2022, the Partnership entered into an amendment to the Facility Agreement.

The additional advance under the Amended Agreement is in the amount of $80,284,000, at a fixed interest rate of 4.33%.

The Partnership’s obligations under the Facility Agreement are secured by mortgages on certain properties pursuant to certain Mortgage, Assignment of Leases and Rents, and Security Agreement and Fixture Filings.

The Partnership used the proceeds from the June, 2022 refinancing to pay down approximately $37,065,000 of existing debt secured by four properties, along with approximately $894,000 in prepayment penalties, which are included in other expenses.

The remaining balance of approximately $42,384,000 will be used for general partnership purposes.

As a result of the changes discussed above, net income for the nine months ended September 30, 2022 was approximately $1,580,000 compared to income of approximately $200,000 for the nine months ended September 30, 2021, an increase in net income of approximately $1,380,000 (689.0%).

As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $228,000 for the three months ended March 31, 2023, compared to net income of approximately $20,000 for the three months ended March 30, 2022, an increase in income of approximately $208,000 (1034.6%).

This increase is primarily due to an increase in rental revenue to approximately $2,686,000 from $2,430,000, an increase of approximately $256,000 (10.5 %) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Included in the income for the three months ended March 31, 2023 is depreciation and amortization expense of approximately $640,000.

As a result of the changes discussed above, net income for the three months ended March 31, 2023 was approximately $1,754,000 compared to net income of approximately $342,000 for the three months ended March 31, 2022, an increase in income of approximately $1,412,000 (412.3%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first nine months of 2022 and 2021 was the proceeds from the refinancing of 4 properties for approximately $42,000,000 and the collection of rents.

The Partnership’s principal use of cash during the first nine months of 2022 was the purchase of Treasury Bills.

The majority of cash and cash equivalents of $59,473,939 at September 30, 2022 and $96,083,508 at December 31, 2021 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $36,609,569 for the nine months ended September 30, 2022 is summarized as follows:

Nine Months Ended September 30,

The Partnership’s principal source of cash during the first three months of 2023 was the collection of rents and for 2022 was the proceeds from the refinancing of 5 properties for approximately $43,000,000, interest income generated from the purchase of Treasury Bills, and the collection of rents.

The Partnership’s principal use of cash during the first three months of 2023 was the purchase of Treasury Bills and the purchase of the commercial property at 653 Worcester Road for approximately $10,000,000.

The majority of cash and cash equivalents of $24,654,625 at March 31, 2023 and $49,560,723 at December 31, 2022 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $24,906,098 for the three months ended March 31, 2023 is summarized as follows:

Three Months Ended March 31,

Cash provided by operating activities

Cash (used in) investing activities

Cash provided by (used in) financing activities

Cash (used in) financing activities

Repurchase of Depositary Receipts, Class B and General Partner Units

Distributions paid

Net (decrease) increase in cash and cash equivalents

Net (decrease) in cash and cash equivalents

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 decrease in cash used in investing activities is primarily due to improvements to rental properties, and the purchase of Treasury Bills.

The change in cash used in financing activities is due to the refinancing of 4 properties, the pay down of mortgages, the repurchase of depositary receipts, and distributions paid.

The decrease in cash used in investing activities is as follows:

the Partnership purchased a commercial retail property of approximately 20,700 square feet, located at 653 Worcester Road in Framingham, Massachusetts for the sum of approximately $10,151,000.

This acquisition was funded from the Partnership’s cash reserves.

Closing costs were approximately $59,000.

From the purchase price, the Partnership allocated approximately $585,000 to in- place leases, and approximately $378,000 to the value of tenant relationships;

improvements to rental properties, and the purchase of Treasury Bills.

The change in cash used in financing activities is the pay down of mortgages, the repurchase of depositary receipts, and distributions paid.

During 2023, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $2,173,000.

1 unchanged sentence

Cash reserves have been adequate to fully fund improvements.

The most significant improvements were made at Hamilton Oaks, Captain Parker, Hamilton Green, Westside Colonial, River Drive Apartments, and Redwood Hills at a cost of approximately $747,000, $313,000, $299,000, $292,000, $282,000 and $246,000 respectively.

During the nine months ended September 30, 2022, the Partnership received distributions of approximately $1,207,500 from the investment properties.

For the nine months ended September 30, 2021, the Partnership received $590,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $840,000 and $80,000 for the nine months ended September 30, 2022 and 2021, respectively.

In January 2022, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2022.

The most significant improvements were made at Hamilton Oaks, Lincoln Street, School Street, Woodland Park, Westgate Woburn, and Mill Street Development at a cost of approximately $809,000, $198,000, $184,000, $143,000, $125,000 and $117,000 respectively.

During the three months ended March 31, 2023, the Partnership received distributions of approximately $580,000 from the investment properties.

For the three months ended March 31, 2022, the Partnership received $440,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $400,000 and $240,000 for the three months ended March 31, 2023 and 2022, respectively.

In March 2023, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2023.

In addition to the quarterly distribution, there was a special distribution of $38.40 per Class A unit ($1.28 per Receipt) payable on March 31, 2023.

In April 2022, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on June 30, 2022.

In July 2022, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on September 30, 2022.

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

5 unchanged sentences

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

On December 3,

2021, the Partnership paid off the line.

On December 3, 2021, the Partnership paid off the line.

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.

The Partnership may also sell or refinance properties.

The Partnership’s net income and cash flow may fluctuate dramatically from year to year as

a result of the sale or refinancing of properties, property improvements, increases or decreases in rental income or expenses, or the loss of significant tenants.

The Partnership’s net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, property improvements, increases or decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of September 30, 2022, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

As of March 31, 2023, 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 September 30, 2022, our proportionate share of the non-recourse debt related to these investments was approximately $70,835,000.

At March 31, 2023, our proportionate share of the non-recourse debt related to these investments was approximately $70,778,000.

See Note 15 to the Consolidated Financial Statements.

Contractual Obligations

As of September 30, 2022, we are subject to contractual payment obligations as described in the table below.

As of March 31, 2023, we are subject to contractual payment obligations as described in the table below.

Payments due by period

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Item 2. Management’s Discussion and Analysis