What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-09 compared with 2023-08-08 · 78 added, 73 removed, 255 unchanged (37% of the section changed)

9 unchanged sentences

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.

Currently, $68,000,000 of these reserves are invested in short-term US Treasury bills maturing in 6 months or less with interest rates between 4.4% and 5.0% and approximately $40,000,000 is in a Money Market mutual fund currently earning approximately 5.13%.

Currently, $85,407,000 of these reserves are invested in short-term US Treasury bills maturing in 6 months or less with interest rates between 4.8% and 5.4%.

Since the Partnership’s long-term goals include the acquisition of additional properties, a portion of the proceeds from the refinancing and sale of properties is reserved for this purpose.

1 unchanged sentence

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.

On July 14, 2023, the partnership purchased a 52 unit residential property in the South End neighborhood of Boston, MA comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, for a purchase price of approximately $27,500,000 with Partnership cash reserves.

The vacancy rate for the Partnership’s residential properties as of August 1, 2023 was 1.8% as compared with a vacancy rate of 2.0% as of August 1, 2022.

The vacancy rate for the Joint Venture properties as of August 1, 2023 was 1.3 %, as compared to 0.9% for the same period last year.

On July 14, 2023, the partnership purchased a mixed use property in the South End neighborhood of Boston, MA comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and approximately 3,400 square feet of commercial space for a purchase price of $27,500,000 with Partnership cash reserves.

The vacancy rate for the Partnership’s residential properties as of November 1, 2023 was 0.9% as compared with a vacancy rate of 1.8% as of November 1, 2022.

The vacancy rate for the Joint Venture properties as of November 1, 2023 was 0.7 %, as compared to 0.9% for the same period last year.

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

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

During the second quarter of 2023, rents increased an average of 6.8% for renewals and increased an average of 7.8% for new leases.

During the third quarter of 2023, rents increased an average of 6.4% for renewals and increased an average of 9.9% for new leases.

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

For the second quarter of 2023, consolidated revenue increased by 6.9%, operating expenses increased by 8.5% and Income before Other Income (Expense) increased by 2.8%, as compared to the second quarter of 2022.

For the third quarter of 2023, excluding the increase in income and expense from 653 Worcester Road and the Shawmut Apartments, consolidated revenue increased by 7.3%, operating expenses increased by 5.7% and Income before Other Income (Expense) increased by 11.9%, as compared to the third quarter of 2022.

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

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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.

As of June 30, 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 of September 30, 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 June 30, 2023, the Partnership has purchased 1,502,734 Depositary Receipts.

During the six months ended June 30, 2023, the Partnership purchased a total of 14,274 Depositary Receipts.

At August 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).

From the start of the Stock Repurchase Program in 2007 through September 30, 2023, the Partnership has purchased 1,517,690 Depositary Receipts.

During the nine months ended September 30, 2023, the Partnership purchased a total of 29,230 Depositary Receipts.

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

While the Borrower has disputed that any events of default actually exist, it is working diligently with KeyBank to obtain KeyBank’s consent to the transfer.

At November 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 six months ended June 30, 2023, tenant renewals were approximately 78% with an average rental increase of approximately 6.6%, new leases accounted for approximately 22% with rental rate increases of approximately 8.6%.

During the six months ended June 30, 2023, leasing commissions were approximately $197,000 compared to approximately $156,000 for the six months ended June 30, 2022, an increase of approximately $41,000 (26.3%).

Tenant concessions were approximately $39,000 for the six months ended June 30, 2023, compared to approximately $24,000 for the six months ended June 30, 2022, an increase of approximately $15,000 (62.5%).

Tenant improvements were approximately $4,866,000 for the six months ended June 30, 2023, compared to approximately $1,089,000 for the six months ended June 30, 2022, an increase of approximately $3,777,000 (346.8%).

Hamilton accounted for approximately 2.5% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2023 and 2.8% during the six months ended June 30, 2022.

During the nine months ended September 30, 2023, tenant renewals were approximately 72% with an average rental increase of approximately 6.4%, new leases accounted for approximately 28% with rental rate increases of approximately 9.5%.

During the nine months ended September 30, 2023, leasing commissions were approximately $459,000 compared to approximately $264,000 for the nine months ended September 30, 2022, an increase of approximately $195,000 (74.0%).

Tenant concessions were approximately $66,000 for the nine months ended September 30, 2023, compared to approximately $39,000 for the nine months ended September 30, 2022, an increase of approximately $27,000 (69.2%).

Tenant improvements were approximately $2,641,000 for the nine months ended September 30, 2023, compared to approximately $1,723,000 for the nine months ended September 30, 2022, an increase of approximately $918,000 (53.3%).

Hamilton accounted for approximately 1.8% of the repair and maintenance expenses paid for by the Partnership during the nine months ended September 30, 2023 and 2.6% during the nine months ended September 30, 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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Additionally, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions.

Overall, Hamilton provided approximately $108,000 (97.1%) and approximately $107,000 (81.6%) of the legal services paid for by the Partnership during the six months ended June 30, 2023 and 2022 respectively.

Overall, Hamilton provided approximately $199,000 (71.9%) and approximately $162,000 (72.0%) of the legal services paid for by the Partnership during the nine months ended September 30, 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 six months ended June 30, 2023, Hamilton provided the Partnership approximately $521,000 in construction and architectural services, compared to approximately $42,000 for the six months ended June 30, 2022.

During the nine months ended September 30, 2023, Hamilton provided the Partnership approximately $563,000 in construction and architectural services, compared to approximately $89,000 for the nine months ended September 30, 2022.

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

During the six months ended June 30, 2023 and 2022, Hamilton charged the Partnership $62,500 for bookkeeping and accounting services.

During the nine months ended September 30, 2023 and 2022, 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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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 .

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.

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.

The Partnership evaluates the non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues).

59 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended June 30, 2023 and June 30, 2022

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,738,000 during the three months ended June 30, 2023, compared to approximately $4,611,000 for the three months ended June 30, 2022, an increase of approximately $127,000 (2.8%).

Three Months Ended September 30, 2023 and September 30, 2022

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $4,899,000 during the three months ended September 30, 2023, compared to approximately $4,561,000 for the three months ended September30, 2022, an increase of approximately $338,000 (7.4%).

The rental activity is summarized as follows:

Occupancy Date

August 1, 2023

August 1, 2022

November 1, 2023

November 1, 2022

Total square feet

Rental Income (in thousands)

Three Months Ended June 30,

Three Months Ended September 30,

Residential percentage

1 unchanged sentence

Contingent rentals

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022:

Three Months Ended June 30,

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022:

Three Months Ended September 30,

Rental income

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Other Income (Expense)

Rental income for the three months ended June 30, 2023 was approximately $17,965,000, compared to approximately $16,826,000 for the three months ended June 30, 2022, an increase of approximately $1,139,000 (6.8%).

Excluding Walgreen’s revenue of approximately $202,000 at 653 Worcester Road, there was an increase of approximately $937,000 (5.6%).

The Partnership properties with the largest increases in rental income include 1144 Commonwealth, Westgate Apartments, Woodland Park, Hamilton Green, and 140 North Beacon, with increases of $218,000, $107,000, $92,000, $84,000 and $74,000 respectively.

Rental income for the three months ended September 30, 2023 was approximately $18,804,000, compared to approximately $16,974,000 for the three months ended September 30, 2022, an increase of approximately $1,830,000 (10.8%).

Excluding revenues from Walgreen’s and Shawmut’s of approximately $632,000, there was an increase of approximately $1,198,000 (7.1%).

The Partnership properties with the largest increases in rental income include 1144 Commonwealth, 62 Boylston Street, 659 Worcester Road, Westgate Apartments, Woodland Park, and Redwood Hills with increases of $188,000, $161,000, $116,000, $89,000, $82,000 and $82,000 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, 2023 were approximately $13,363,000 compared to approximately $12,321,000 for the three months ended June 30, 2022, an increase of approximately $1,042,000 (8.5%).

Excluding the increase in expenses at 653 Worcester Road of approximately $300,000, operating expenses increased approximately $742,000 (6.0%).

The factors contributing to the increase are an increase in repairs and maintenance of approximately $504,000 (17.0%), an increase in administrative expenses of approximately $244,000 (39.1%), and an increase in operating costs of approximately $199,000 (13.1%), partially offset by a decrease in depreciation and amortization expenses of approximately $115,000 (2.8%) due to fully depreciated assets.

Interest expense for the three months ended June 30, 2023 was approximately $3,926,000 compared to approximately $3,624,000 for the three months ended June 30, 2022, an increase of approximately $302,000 (8.3%).

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 June 30, 2023 was approximately $1,200,000 compared to approximately $0 for the three months ended June 30, 2022, an increase of approximately $1,200,000.

Operating expenses for the three months ended September 30, 2023 were approximately $14,062,000 compared to approximately $12,517,000 for the three months ended September 30, 2022, an increase of approximately $1,545,000 (12.3%).

Excluding 653 Worcester Road and Shawmut Apartments, operating expenses were approximately $13,225,000, an increase of approximately $707,000 (5.6%).

The factors contributing to the increase are an increase in repairs and maintenance of approximately $457,000 (14.6%), a decrease in depreciation and amortization expense of approximately $353,000 (8.6%), an increase in taxes and insurance of approximately $197,000 (8.6%), and an increase in renting expense of approximately $205,000 (112.7%).

Interest expense for the three months ended September 30, 2023 was approximately $3,956,000 compared to approximately $3,982,000 for the three months ended September 30, 2022, a decrease of approximately $26,000 (0.7%).

Interest income for the three months ended September 30, 2023 was approximately $1,083,000 compared to approximately $363,000 for the three months ended September 30, 2022, an increase of approximately $720,000 (198.2%).

The increase is due to investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.8% to 5.4%.

At June 30, 2023, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

At September 30, 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 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $119,000 for the three months ended June 30, 2023, compared to net income of approximately $90,000 for the three months ended June 30, 2022, an increase in income of approximately $29,000 (32.5%).

This increase is primarily due to an increase in rental revenue to approximately $2,711,000 from $2,471,000, an increase of approximately $240,000 (9.7%) for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

Included in the income for the three months ended June 30, 2023 is depreciation and amortization expense of approximately $645,000.

As a result of the changes discussed above, net income for the three months ended June 30, 2023 was approximately $2,225,000 compared to net income of approximately $243,000 for the three months ended June 30, 2022, an increase in income of approximately $1,982,000 (815.5%).

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $9,190,000 during the six months ended June 30, 2023, compared to approximately $8,388,000 for the six months ended June 30, 2022, an increase of approximately $802,000 (9.6%).

Six Months Ended June 30,

As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $149,000 for the three months ended September 30, 2023, compared to net income of approximately $94,000 for the three months ended September 30, 2022, an increase in income of approximately $55,000 (59%).

This increase is primarily due to an increase in rental revenue to approximately $2,775,000 from $2,625,000, an increase of approximately $150,000 (5.7%) for the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

Included in the income for the three months ended September 30, 2023 is depreciation and amortization expense of approximately $651,000.

As a result of the changes discussed above, net income for the three months ended September 30, 2023 was approximately $2,175,000 compared to net income of approximately $995,000 for the three months ended September 30, 2022, an increase in income of approximately $1,180,000 (118.6%).

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $14,089,000 during the nine months ended September 30, 2023, compared to approximately $12,949,000 for the nine months ended September 30, 2022, an increase of approximately $1,140,000 (8.8%).

Nine Months Ended September 30,

Rental income

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Other (Expense) Income

Rental income for the six months ended June 30, 2023 was approximately $35,533,000, compared to approximately $33,285,000 for the six months ended June 30, 2022, an increase of approximately $2,248,000 (6.8%).

Excluding revenues from 653 Worcester Road of approximately $350,000, revenue increases approximately $1,898,000(5.7%).

Rental income for the nine months ended September 30, 2023 was approximately $54,338,000, compared to approximately $50,260,000 for the nine months ended September 30, 2022, an increase of approximately $4,078,000 (8.1%).

Excluding revenues from 653 Worcester Road and Shawmut Apartments of approximately $981,000, revenue increased approximately $3,097,000 (6.2%).

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

The Partnership properties with the largest increases in rental income include 62 Boylston, 1144 Commonwealth, Westgate Apartments, Woodland Park, and Hamilton Green, with increases of $413,000, $403,000, $236,000, $160,000 and $151,000 respectively.

The Partnership properties with the largest increases in rental income include 1144 Commonwealth, 62 Boylston, Westgate Apartments, Woodland Park, Hamilton Green, and 140 North Beacon Street with increases of $591,000, $574,000, $326,000, $242,000, $213,000 and $212,000 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 six months ended June 30, 2023 were approximately $26,603,000 compared to approximately $25,124,000 for the six months ended June 30, 2022, an increase of approximately $1,478,000 (5.9%), Excluding operating costs for 653 Worcester Road of approximately $610,000, operating expenses increased approximately $868,000 (3.5%).The factors contributing to this net increase are an increase in repairs and maintenance expenses of approximately $987,000 (18.8%), an increase in taxes and insurance of approximately $318,000 (6.9%), and an increase in administrative expenses of approximately $273,000 (20.5%), partially offset by a decrease in depreciation and amortization of approximately $290,000 (3.6%).

Interest expense for the six months ended June 30, 2023 was approximately $7,825,000 compared to approximately $7,078,000 for the six months ended June 30, 2022, an increase of approximately $747,000 (10.5%).

Operating expenses for the nine months ended September 30, 2023 were approximately $40,665,000 compared to approximately $37,642,000 for the nine months ended September 30, 2022, an increase of approximately $3,023,000 (8.0%).

Excluding 653 Worcester Road and Shawmut Apartments, operating expenses were approximately $39,217,000, an increase of approximately $1,575,000 (4.2%).The factors contributing to this net increase are an increase in repairs and maintenance expenses of approximately $1,426,000 (17.0%), an increase in taxes and insurance of approximately $454,000 (6.6%), an increase in renting expense of approximately $320,000 (63.8%), and an increase in operating costs of approximately $194,000 (3.5%).

Interest income for the nine months ended September 30, 2023 was approximately $3,350,000 compared to approximately $363,000 for the three months ended September 30, 2022, an increase of approximately $2,987,000 (821.9%).

The increase is due to investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.8% to 5.4%.

Interest expense for the nine months ended September 30, 2023 was approximately $11,781,000 compared to approximately $11,061,000 for the nine months ended September 30, 2022, an increase of approximately $720,000 (6.5%).

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

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As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $347,000 for the six months ended June 30, 2023, compared to net income of approximately $110,000 for the six months ended June 30, 2022, an increase in income of approximately $237,000 (214.8%).

This increase is primarily due to an increase in rental revenue of approximately $ 5,397,000 for the six months ended June 30, 2023 from approximately $4,901,000 for the six months ended June 30, 2022, an increase of approximately $496,000 (10.1%).

Included in the income for the six months ended June 30, 2023 is depreciation and amortization expense of approximately $1,285,000.

As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $496,000 for the nine months ended September 30, 2023, compared to net income of approximately $204,000 for the nine months ended September 30, 2022, an increase in income of approximately $292,000 (143.3%).

This increase is primarily due to an increase in rental revenue of approximately $ 8,176,000 for the nine months ended September 30, 2023 from approximately $7,526,000 for the nine months ended September 30, 2022, an increase of approximately $650,000 (8.6%).

Included in the income for the nine months ended September 30, 2023 is depreciation and amortization expense of approximately $1,936,000.

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.

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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 six months ended June 30, 2023 was approximately $3,979,000 compared to income of approximately $585,000 for the six months ended June 30, 2022, an increase in net income of approximately $3,394,000 (579.8%).

As a result of the changes discussed above, net income for the nine months ended September 30, 2023 was approximately $6,154,000 compared to income of approximately $1,580,000 for the nine months ended September 30, 2022, an increase in net income of approximately $4,574,000 (289.4%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six 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 six 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 $55,700,166 at June 30, 2023 and $49,560,723 at December 31, 2022 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $6,139,443 for the six months ended June 30, 2023 is summarized as follows:

Six Months Ended June 30,

The Partnership’s principal source of cash during the first nine 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 nine months of 2023 was the purchase of Treasury Bills and the purchase of two properties:

the commercial property at 653 Worcester Road for approximately $10,000,000, and the purchase of a mixed use property in the South End neighborhood of Boston, MA, for a purchase price of approximately $27,500,000.

The majority of cash and cash equivalents of $16,141,398 at September 30, 2023 and $49,560,723 at December 31, 2022 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $33,419,325 for the nine months ended September 30, 2023 is summarized as follows:

Nine Months Ended September 30,

Cash provided by operating activities

Cash provided by (used in) investing activities

Cash (used in) investing activities

Cash (used in) provided by financing activities

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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.

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, and the Partnership purchased a mixed use property in the South End neighborhood of Boston, MA, for a purchase price of approximately $27,500,000.

These acquisitions were funded from the Partnership’s cash reserves.

Closing costs were approximately $140,000.

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.

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Cash reserves have been adequate to fully fund improvements.

The most significant improvements were made at Hamilton Oaks, 1144 Commonwealth School Street, Hamilton Green, Lincoln Street, and 62 Boylston Street at a cost of approximately $1,203,000, $1,093,000, $395,000, $233,000, $208,000 and $202,000 respectively.

During the six months ended June 30, 2023, the Partnership received distributions of approximately $1,634,000 from the investment properties.

For the six months ended June 30, 2022, the Partnership received $1,208,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $920,000 and $840,000 for the six months ended June 30, 2023 and 2022, respectively.

The most significant improvements were made at Hamilton Oaks, 1144 Commonwealth, School Street, 659 Worcester Road, Redwood Hills, and 62 Boylston Street at a cost of approximately $1,411,000, $1,335,000, $539,000, $404,000, $305,000 and $293,000 respectively.

During the nine months ended September 30, 2023, the Partnership received distributions of approximately $3,033,500 from the investment properties.

For the nine months ended September 30, 2022, the Partnership received $1,208,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $1,492,000 and $840,000 for the nine months ended September 30, 2023 and 2022, respectively.

In August 2023, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), which was paid on September 30, 2023.

In May 2023, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), which was paid on June 30, 2023.

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

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

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.

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 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.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of June 30, 2023, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

As of September 30, 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 June 30, 2023, our proportionate share of the non-recourse debt related to these investments was approximately $70,750,000.

At September 30, 2023, our proportionate share of the non-recourse debt related to these investments was approximately $70,721,000.

See Note 15 to the Consolidated Financial Statements.

Contractual Obligations

As of June 30, 2023, we are subject to contractual payment obligations as described in the table below.

As of September 30, 2023, we are subject to contractual payment obligations as described in the table below.

Payments due by period

13 unchanged sentences

● The Partnership is subject to the general economic risks affecting the real estate industry, such as dependence on tenants’ financial condition, the need to enter into new leases or renew leases on terms favorable to tenants in order to generate rental revenues and our ability to collect rents from our tenants.

● The Partnership is also impacted by changing economic conditions making alternative housing arrangements more or less attractive to the Partnership’s tenants, such as the interest rates on single family home mortgages and the availability and purchase price of single family homes in the Greater Boston metropolitan area.

home mortgages and the availability and purchase price of single family homes in the Greater Boston metropolitan area.

● The Partnership is subject to significant expenditures associated with each investment, such as debt service payments, real estate taxes, insurance and maintenance costs, which are generally not reduced when circumstances cause a reduction in revenues from a property.

26 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