What changed in this filing

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Item 9A. Controls and Procedures

2025-03-14 compared with 2024-03-14 · 191 added, 194 removed, 1411 unchanged (21% of the section changed)

24 unchanged sentences

The General Partner is responsible for making all decisions and taking all action deemed by it necessary or appropriate to conduct the business of the Partnership.

The General Partner engages The Hamilton Company, Inc.

to manage the properties of the Partnership and its Subsidiary Partnerships.

The General Partner engages The Hamilton Company to manage the properties of the Partnership and its Subsidiary Partnerships.

Hamilton is wholly owned by JPB Real Estate LLC and Maisie Brown LLC, entities controlled by Jameson Brown and Harley Brown, respectively.

1 unchanged sentence

Executive Compensation” for information concerning fees paid by the Partnership to Hamilton during 2024.

Because the General Partner has engaged Hamilton as the manager for the Properties, the General Partner has no employees.

Because the General Partner has engaged The Hamilton Company as the manager for the Properties, the General Partner has no employees.

The directors of the General Partner are Ronald Brown, Jameson Brown, Martina Alibrandi, David Aloise, Andrew Bloch, Sally Michael, and David Reier.

43 unchanged sentences

Brown has the requisite experience, qualifications, capabilities and skills necessary to serve as a member of the Board of Directors.

Name and Position

Other Position

David Aloise,

2 unchanged sentences

Founder and principal of Aloise & Associates, LLC (since 2000), a consulting firm that provides advisory, training, and credit risk management services;

BankBoston Corporation (1979-2000) Director of Commercial Loan Workout, Managing Director Small Business Banking, Vice President Restructured Real Estate, Vice President C & I Loan Workout;

Board of Trustees New England Banking Institute;

BankBoston Corporation (1979-2000) Department Head of Commercial Loan Workout, Managing Director Small Business Banking, Vice President Restructured Real Estate, Vice President C & I Loan Workout.

Prior experience includes Board of Trustees New England Banking Institute;

Advisory Board Member Wells Fargo Retail Finance, LLC;

Senior Advisor to Eaton Vance Bank Loan Mutual Fund Group;.Director and Audit Committee Member AGF Global,Inc.;

Senior Advisor to Eaton Vance Bank Loan Mutual Fund Group;

Director and Audit Committee Member AGF Global,Inc.;

Director, Audit and Compensation Committee Member David’s Bridal, Inc.

Director and Chair of Audit Committee, Anuvu, Inc.

Currently, Director and Chair of Audit Committee, Anuvu, Inc.

Member of the Turnaround Management Association.

2 unchanged sentences

Aloise has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.

Name and Position

Other Position

Andrew Bloch,

19 unchanged sentences

a Boston based drug development company (2014 – 2016);

Board Member and Treasurer of Sancta Maria Nursing Facility in Cambridge (since 2021);

leasing consultant to Sancta Maria Nursing Facility (since 2018) which involves the leases of commercial space at the facility.

Board Member and Treasurer of Sancta Maria Nursing Facility in Cambridge (2021-2024);

leasing consultant to Sancta Maria Nursing Facility (2018-2024) which involves the leases of commercial space at the facility.

Alibrandi’s extensive business experience, the Board of Directors concluded that she has the requisite experience, qualifications, capabilities and skills necessary to serve as a member of the Board of Directors.

10 unchanged sentences

Michael has the requisite experience, qualifications, capabilities and skills necessary to serve as a member of the Board of Directors.

Name and Position

Other Position

Director (since 2021)

Director of the General Partner.

Reier is a partner of the Boston office of the national law firm Arent Fox LLP.

Retired Partner of the Boston office of the national law firm Arent Fox LLP.

Reier is licensed to practice law in Massachusetts and is admitted to practice in the U.S.

9 unchanged sentences

Section 16(a) of the Securities Exchange Act of 1934 requires the Partnership’s directors, executive officers, and persons who own more than 10% of a registered class of the Partnership’s equity securities to file with the Securities and Exchange Commission reports of ownership changes and changes in ownership of the Partnership.

directors and greater-than-10% shareholders are required by SEC regulations to furnish the Partnership with copies of all Section 16(a) forms they file.

Officers, directors and greater-than-10% shareholders are required by SEC regulations to furnish the Partnership with copies of all Section 16(a) forms they file.

Based solely upon a review of Forms 3 and 4 furnished to the Partnership under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year, Forms 5 furnished to the Partnership with respect to its most recent fiscal year and any written representations received by the Partnership from persons required to file such forms, all of the following persons — either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act — filed on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year.

21 unchanged sentences

EXECUTIVE COMPENSATIO N

The Partnership does not have “Executive Compensation.” As more fully described below, the Partnership employs Hamilton, a management company, to which it pays management fees and administrative fees.

The Partnership does not have “Executive Compensation.” As more fully described below, the Partnership employs The Hamilton Company, a management company, to which it pays management fees and administrative fees.

The Partnership is not required to and did not pay any compensation to its officers or the officers and directors of the General Partner in 2024.

As more fully described below, the Partnership employs Hamilton, which is solely responsible for performing all management and policy making functions for the Partnership.

As more fully described below, the Partnership employs The Hamilton Company, which is solely responsible for performing all management and policy making functions for the Partnership.

The only compensation paid by the Partnership to any person or entity is in the form of management fees and administrative fees paid to the General Partner, or any management entity employed by the General Partner, in accordance with the Partnership Agreement.

3 unchanged sentences

In addition, upon the sale or disposition of any Partnership Properties, the General Partner, or any management entity which is the effective cause of such sale, is entitled to a commission equal to 3% of the gross sale price (the “Commission”), provided that should any other broker be entitled to a commission in connection with the sale, the commission shall be the difference between 3% of the gross sale price and the amount to be paid to such broker.

The General Partner has engaged The Hamilton Company, Inc.

to operate and manage the Partnership, and in accordance with the Partnership Agreement, the Management Fee, the Administrative Fees and the Commission are paid to Hamilton.

The General Partner has engaged The Hamilton Company to operate and manage the Partnership, and in accordance with the Partnership Agreement, the Management Fee, the Administrative Fees and the Commission are paid to The Hamilton Company.

See “Item 10.

Directors and Executive Officers of the Registrant.” The total Management Fee paid to Hamilton during 2023 was approximately $2,948,000.

The management services provided by Hamilton include but are not limited to:

Directors and Executive Officers of the Registrant.” The total Management Fee paid to The Hamilton Company during 2024 was approximately $3,178,000.

The management services provided by The Hamilton Company include but are not limited to:

collecting rents and other income;

1 unchanged sentence

terminating leases, evicting tenants, purchasing supplies and equipment, financing and refinancing properties, settling insurance claims, maintaining administrative offices and employing personnel.

In 2023, the Partnership and its Subsidiary Partnerships paid administrative fees to Hamilton of approximately $1,289,000 inclusive of construction supervision and architectural fees of approximately $606,000, repairs and maintenance service fees of approximately $261,000, legal fees of approximately $231,000, renting expenses of approximately $66,000 and $125,000 for accounting services.

In 2024, the Partnership and its Subsidiary Partnerships paid administrative fees to The Hamilton Company of approximately $1,032,000 inclusive of construction supervision and architectural fees of approximately $504,000, repairs and maintenance service fees of approximately $175,000, legal fees of approximately $171,000, renting expenses of approximately $57,000 and $125,000 for accounting services.

In addition, the Partnership paid $24,000 to Ronald Brown for construction supervision services.

Sally Michael is a Director of NewReal, Inc., and she is a partner of Saul Ewing Arnstein LLP.

Sally Michael is a Director of NewReal, Inc., and she is a partner of Saul Ewing LLP.

Saul Ewing LLP billed the Partnership for legal fees totaling $115,000, $121,000, and $84,000 for 2024, 2023, and 2022 respectively.

Additionally, the Hamilton Company received approximately $797,000 from the 40-50% owned Investment Properties of which approximately $699,000 was the management fee, approximately $9,000 was for construction supervision and architectural fees, approximately $57,000 was for maintenance services, approximately $31,000 for legal services and approximately $1,000 for renting expenses.

Additionally, the Hamilton Company received approximately $935,000 from the 40-50% owned Investment Properties of which approximately $751,000 was the management fee, approximately $101,000 was for construction supervision and architectural fees, approximately $64,000 was for maintenance services, and approximately $19,000 for legal services.

The Advisory Committee held 4 meetings during 2024, and a total of $16,000 was paid for attendance and participation in such meetings.

2 unchanged sentences

The Board of Directors of our General Partner does not have a compensation committee.

No member of the Board of Directors was at any time in 2023 or at any other time an officer or employee of the General Partner, and no member had any relationship with the Partnership requiring disclosure as a related-person transaction under Item 404 of Regulation S-K.

No officer of the General Partner has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board of Directors of the General Partner at any time in 2023.

No member of the Board of Directors was at any time in 2024 or at any other time an officer or employee of the General Partner other than Jameson Brown, the Treasurer of the Partnership, the Chief Financial Officer and a director of the General Partner, and the Chief Executive Officer of The Hamilton Company;

and Ronald Brown, a director and the President of the General Partner, and a director of the Partnership.

No member had any relationship with the Partnership requiring disclosure as a related-person transaction under Item 404 of Regulation S-K.

No other officer of the General Partner has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board of Directors of the General Partner at any time in 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMEN T AND RELATED STOCKHOLDER MATTERS

2 unchanged sentences

As of March 12, 2025, there were issued and outstanding 1,407 Class A Units (not including the Depositary Receipts) held by 109 registered unit holders, 22,168 Class B Units and 1,167 General Partnership Units held by the persons listed below.

During 2023, zero (0) Class A Units were exchanged for Depositary Receipts.

During 2024, 124 Class A Units were exchanged for Depositary Receipts.

The following table sets forth certain information regarding each class of Partnership Units beneficially owned as of December 31, 2024 by (i) each person known by the Partnership to beneficially own more than 5% of any class of Partnership Units, (ii) each director and officer of the General Partner and (iii) all directors and officers of the General Partner as a group.

45 unchanged sentences

Jameson Brown and Sally Michael as Managers, have voting and investment power over the Class B Units held by the LLC, subject to the provisions of the LLC, and thus may be deemed to beneficially own the Class B Units held by HBC.

(3) Since The Harold Brown 2013 Revocable Trust and Ronald Brown are the controlling stockholders, executive officers and directors of NewReal, Inc., they may be deemed to beneficially own all of the General Partnership Units held of record by NewReal, Inc.

Sally Michael and David Reier were the trustees of the Harold Brown 2013 Revocable Trust as of December 31, 2023.

The estate was settled on January 2, 2024, giving Jameson Brown and Harley Brown each ownership of 37.5% of NewReal.

(3) Since Jameson Brown and Ronald Brown are the controlling stockholders, executive officers and directors of NewReal, Inc., they may be deemed to beneficially own all of the General Partnership Units held of record by NewReal.

The estate was settled on January 2, 2024, giving Jameson Brown and Harley Brown each 37.5% ownership of NewReal.

(4) Consists of 92,600 Depositary Receipts held of record jointly by Ronald Brown and his wife.

2 unchanged sentences

(5) Consists of 287,500 Depositary Receipts held by HJB 2009 Holdings, LLC.

HJB 2009 Holdings LLC is owned 50% by JPB Real Estate LLC, an entity owned by Jameson Brown, and 50% owned Maisie Brown LLC, an entity owned by Harley Brown.

HJB 2009 Holdings LLC is owned 50% by JPB Real Estate LLC, an entity owned by Jameson Brown, and 50% by Maisie Brown LLC, an entity owned by Harley Brown.

Sally Michael is the Manager.

Accordingly Jameson.

Michael and Harley Brown may be deemed to beneficially own the Depositary Receipts held by the LLC.

Accordingly, Jameson Brown, Sally Michael, and Harley Brown may be deemed to beneficially own the Depositary Receipts held by the LLC.

Because a Depositary Receipt represents beneficial ownership of one thirtieth of a Class A Unit, the Trusts collectively may be deemed to beneficially own approximately 9,583 Class A Units.

2 unchanged sentences

Jameson Brown and Ronald Brown are trustees of the foundation and jointly have voting and dispositive control over the Depositary Receipts.

Accordingly, the Browns may be deemed to beneficially own the Depositary Receipts held by the Foundation Because a Depositary Receipt represents beneficial ownership of on thirtieth of a Class A Unit, the Foundation may be deemed to beneficially own approximately 2,073 Class A Units.

Accordingly, the Browns may be deemed to beneficially own the Depositary Receipts held by the Foundation.

Because a Depositary Receipt represents beneficial ownership of on thirtieth of a Class A Unit, the Foundation may be deemed to beneficially own approximately 2,073 Class A Units.

(Approximately 2.22% of the outstanding Class A Units).

7 unchanged sentences

Jameson Brown and Sally Michael are the managers of HBC Holdings, LLC, which owns 17,262 Class A units of the Partnership, and 75% of the Class B units of the Partnership.

Sally Michael and David Reier are the Trustees of both the Harold Brown 2009 Irrevocable Trust FBO Harley Oliver Brown and the Harold Brown 2009 Irrevocable Trust FBO Jameson Pruitt Brown, which together own HJB 2009 Holdings, LLC, which owns 9,583 Class A units of the Partnership;

JPB Real Estate LLC and Maisie Brown LLC, entities beneficially owned by Jameson Brown and Harley Brown, together own HJB 2009 Holdings, LLC, which is managed by Sally E.

Michael and owns 9,583 Class A units of the Partnership.

Jameson Brown and Ronald Brown are Trustees of the Hamilton Company Charitable Foundation, which owns 2,073 Class A units of the Partnership.

38 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

14 unchanged sentences

A Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A Partnership’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the Partnership;

A Partnership’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the Partnership;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Partnership’s assets that could have a material effect on the financial statements.

14 unchanged sentences

We performed the following procedures, among others, in connection with forming our overall opinion on the consolidated financial statements.

We tested management’s internal controls over the identification of potential investment property impairments, such as controls over the Partnership’s annually analysis of net operating income, as well management review controls to identify potential events which could indicate impairment.

We tested management’s internal controls over the identification of potential investment property impairments, such as controls over the Partnership’s annual analysis of net operating income, as well as management review controls to identify potential events which could indicate impairment.

We examined and evaluated (i) the Partnership’s net operating income trend analysis;

(ii) the completeness and accuracy of the underlying data used in management’s assessment of indicators of impairment;

and (iii) reasonableness of significant assumptions and methods used in developing the undiscounted cash flow estimates.

and (iii) the reasonableness of significant assumptions and methods used in developing the undiscounted cash flow estimates.

When the net operating income analysis indicated that additional analysis was required, we assessed whether the significant assumptions, including estimated holding period, rental revenues and operating expenses during the holding period, capital expenditures and rates of return used in determining the future undiscounted cash flows were reasonable.

62 unchanged sentences

( 15,045,477 )

Income (loss) from investments in unconsolidated joint ventures

( 2,745,979 )

( 10,360,897 )

Income from investments in unconsolidated joint ventures

( 9,709,666 )

( 10,360,897 )

Net Income (Loss)

( 14,364,873 )

Net Income (Loss) per Unit

Net Income per Unit

Weighted Average Number of Units Outstanding

3 unchanged sentences

Year Ended December 31,

Net income (loss)

( 2,700,163 )

Other comprehensive income (loss):

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

Comprehensive income (loss)

( 2,700,163 )

Other comprehensive income

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

Comprehensive income

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

9 unchanged sentences

( 1,760,916 )

( 9,267,981 )

Stock Buyback

( 4,262,338 )

( 1,011,403 )

( 5,326,973 )

Net unrealized gain on derivative instruments for interest rate swaps

Balance December 31 , 2022

9 unchanged sentences

( 3,925,535 )

( 5,326,973 )

Net unrealized gain on derivative instruments for interest rate swaps

Net unrealized loss on derivative instruments for interest rate swaps

Balance December 31, 2023

9 unchanged sentences

( 1,669,131 )

Net unrealized loss on derivative instruments for interest rate swaps

Net unrealized gain on derivative instruments for interest rate swaps

Balance December 31, 2024

7 unchanged sentences

Cash Flows from Operating Activities

Net Income (Loss)

( 2,700,163 )

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

1 unchanged sentence

Amortization of deferred finance costs

(Income) Loss from investments in joint ventures

Allowance for doubtful accounts

(Income) from investments in joint ventures

( 1,282,102 )

Interest Accrued on Treasury Bills

Property Impairment

Change in operating assets and liabilities

1 unchanged sentence

(Increase) Decrease in rents receivable

(Decrease) Increase in accounts payable and accrued expense

Increase (Decrease) in accounts payable and accrued expense

( 1,551,636 )

(Increase) Decrease in real estate tax escrow

(Increase) in real estate tax escrow

( 1,081,983 )

Decrease (Increase) in prepaid expenses and other assets

(Increase) Decrease in prepaid expenses and other assets

Increase in advance rental payments and security deposits

3 unchanged sentences

Distribution in excess of investment in unconsolidated joint ventures

(Investment) in unconsolidated joint ventures

Investment in U.S.

2 unchanged sentences

( 176,450,397 )

( 177,852,043 )

Proceeds from U.S.

TreasuryBills

Treasury Bills

Improvement of rental properties

2 unchanged sentences

( 5,981,125 )

Developing of rental property and other related costs

( 12,457,016 )

Purchase of rental property

7 unchanged sentences

Proceeds of mortgage notes payable

Proceeds (payments) of line of credit net

( 17,000,000 )

Principal payments of mortgage notes payable

5 unchanged sentences

( 3,925,535 )

( 5,326,973 )

Distributions to partners

4 unchanged sentences

( 15,973,426 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 16,569,114 )

Net (Decrease) in Cash and Cash Equivalents

( 31,330,260 )

( 46,522,785 )

Cash and Cash Equivalents, at beginning of period

86 unchanged sentences

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

Costs directly related to the acquisition, development and construction of rental properties are capitalized.

Capitalized development and construction costs include pre-construction costs, development and construction costs, regulatory fees, interest, property taxes, insurance, construction oversight fees, and other project costs incurred during the period of development.

The Partnership considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity.

Other intangible assets acquired include amounts for in-place lease values 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.

17 unchanged sentences

For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other comprehensive income (“OCI”) and are subsequently reclassified into earnings when the hedged item affects earnings.

Changes in fair value of derivative instruments not designated as hedging and ineffective portions of hedges are recognized in earnings in the affected period.

Income Taxes:

The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships.

Accordingly, no provision for income taxes have been recorded (See Note 14).

Changes in fair value of derivative instruments not designated as hedging and ineffective portions of hedges are

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

recognized in earnings in the affected period.

Income Taxes:

The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships.

Accordingly, no provision for income taxes have been recorded (See Note 14).

Cash Equivalents:

9 unchanged sentences

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

NERA had a comprehensive loss of approximately $ 59,000 in 2023,and comprehensive income of approximately $ 295,000 in 2022, but had no comprehensive income or loss for 2021.

NERA had comprehensive income of approximately $173,000 in 2024, a comprehensive loss of approximately $59,000 in 2023, and comprehensive income of approximately $295,000 for 2022.

Income (Loss) Per Depositary Receipt:

17 unchanged sentences

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

If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used.

A property that is reclassified is measured and recorded individually at the lower of (a) its carrying value before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

Interest Capitalized:

The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year .

During the years ended December 31, 2023, 2022 and 2021 there was no capitalized interest.

For the year ended December 31,2024, there was approximately $ 183,000 of capitalized interest.

For the years ended December 31, 2023 and 2022 there was no capitalized interest.

Extinguishment of Debt:

20 unchanged sentences

Buildings and improvements

Construction in Progress

Kitchen cabinets

11 unchanged sentences

DECEMBER 31, 2024

NEED 12/31/24 F/A SCHEDULE ADDNS / DELETIONS

Initial Cost to

42 unchanged sentences

School St Assoc LLC Residential Apartments Framingham, Massachusetts

WRF Associates LLC Strip Mall Framingham, Massachusetts

WRF Associates LLC

Strip Mall Framingham, Massachusetts

WCB Associates LLC Residential Apartments Brockton, Massachusetts

3 unchanged sentences

( 3,242,049 )

653 Worcester Rd Commercial Framingham, Massachusetts

Shawmut Place LLC, Residential Apartments Boston, Massachusetts

653 Worcester Rd, Framingham,Massachusetts

Shawmut Place LLC Boston, Massachuseyys

(1) The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.

10 unchanged sentences

Buildings, improvements and other assets

Construction in Progress

Write-offs of retired or disposed assets

13 unchanged sentences

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 (“Mortgages”).

The Partnership used the proceeds to pay down approximately $ 65,305,000 of existing debt secured by 11 properties, along with approximately $ 2,700,000 in prepayment penalties, which was included in Other Loss in the Consolidated Statements of Income.

The remaining balance of approximately $ 89,000,000 will be used for general

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

partnership purposes.

See schedule in Note 5, Mortgage Notes Payable, for the details of the transaction as it relates to the specific properties.

Consolidated Statements of Income.

The remaining balance of approximately $ 89,000,000 will be used for general partnership purposes.

On October 14, 2022, the Partnership entered into a loan agreement with Brookline Bank refinancing its loan on 659-665 Worcester Road, Framingham, MA.

The agreement pays down the loan on the existing debt of $ 5,954,546.14 , extends the maturity until October 14, 2032, at a variable interest rate of SOFR rate, plus 1.7 % interest only for 2 years and amortizing using a thirty-year schedule for the balance of the term.

The agreement pays down the loan on the existing debt, currently at $ 5,935,643 as of December 31,2024, extends the maturity until October 14, 2032, at a variable interest rate of SOFR rate, plus 1.7 % interest only for 2 years and amortizing using a thirty-year schedule for the balance of the term.

At closing, the Partnership entered into an interest rate swap contract with Brookline Bank with a notional amount equivalent to the underlying loan principal amortization, resulting in a fixed rate of 4.60 % through the expiration of the interest rate swap contract.

9 unchanged sentences

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

In order to initiate construction, the Partnership expects to demolish the current building structures and start construction in 2024.

No tenants are now occupying the property and with the resulting loss of future cash, Management has recorded an impairment charge of approximately $ 971,000 , the net book value of the building for the Mill Street Development property.

The Partnership demolished the existing building structures in order to start construction in 2024.

With the vacating of tenants, and the resulting loss of future cash, Management recorded an impairment charge in 2023 of approximately $ 971,000 , the net book value of the building for the Mill Street Development property.

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

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

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

It is anticipated that approximately $ 14,769,000 will be incurred in 2025.

As of December 31, 2024, the property, located at 57 Mill Street in Woburn, MA, and which will include 72 residential units comprising approximately 93,000 square feet, is estimated to be completed during the fourth quarter of 2025.

Total investment to date is approximately $ 15,231,000 million, and the total investment upon completion is anticipated to be approximately $ 30 million.

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

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

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

RELATED PARTY TRANSACTIONS

5 unchanged sentences

Of the 2024 expenses referred to above, approximately $ 175,000 consisted of repairs and maintenance, $ 296,000 of administrative expense and approximately $ 57,000 for renting expenses.

Approximately $ 606,000 of expenses for construction, architectural

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

services and supervision of capital projects were capitalized in rental properties.

Additionally in 2023, the Hamilton Company received approximately $ 797,000 from the Investment Properties of which approximately $ 699,000 was the management fee, approximately $ 9,000 was for construction, architectural services and supervision of capital projects, approximately $ 57,000 was for maintenance services, approximately $ 31,000 was for administrative services, and approximately $ 1,000 for renting expenses The management fee is equal to 4 % of gross receipts rental income on the majority of investment properties and 2 % on Dexter Park.

Approximately $ 504,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties.

Additionally in 2024, the Hamilton Company received approximately $ 935,000 from the Investment Properties of which approximately $ 751,000 was the management fee, approximately $ 101,000 was for construction, architectural services and supervision of capital projects, approximately $ 64,000 was for maintenance services, and approximately $ 19,000 was for administrative services.

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

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

14 unchanged sentences

Saul Ewing billed the Partnership for legal fees totaling $ 115,000 , $ 121,000 ,and $ 84,000 for 2024, 2023, and 2022, respectively.

In addition, Saul Ewing billed the Investment properties for legal fees totaling $ 60,000 and $ 24,000 for 2024 and 2023 respectively.

See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

PREPAID EXPENSES and OTHER ASSETS

3 unchanged sentences

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

Intangible assets are approximately $ 1,549,000 net of accumulated amortization of approximately $ 872,000 at December 31, 2023.

Intangible assets are approximately $ 334,000 and $ 677,000 net of accumulated amortization of approximately $ 1,215,000 and $ 872,000 at December 31, 2024 and 2023 respectively.

Financing fees in association with the refinancing and the line of credit of approximately $ 217,000 and $ 52,000 are net of accumulated amortization of approximately $ 60,000 , and $ 130,000 at December 31, 2024 and 2023 respectively.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

MORTGAGE NOTES PAYABLE

12 unchanged sentences

unamortized deferred financing costs

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

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

3 unchanged sentences

The remaining balance of approximately $ 42,404,000 will be used for general partnership purposes .

On November 30, 2021, New England Realty Associates Limited Partnership (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.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

The Partnership used the proceeds to pay down approximately $ 65,305,000 of existing debt secured by 11 properties, along with approximately $ 2,700,000 in prepayment penalties.

The remaining balance of approximately $ 89,000,000 will be used for general partnership purposes.

The breakout by property of the material balances by year are as follows :

PROPERTY NAME

Clovelly Apts LP

Executive Apts LP

N.Beacon 140 LP

Olde English Apt LP

Redwood Hills LP

Hamilton Oaks Assoc.

The breakout by property of the material balances in 2022 are as follows :

PROPERTY NAME

3 unchanged sentences

On October 14, 2022, the Partnership entered into a loan agreement with Brookline Bank refinancing its loan on 659-665 Worcester Road, Framingham, MA.

The agreement pays down the loan on the existing debt of $ 5,954,546 , which has amortized down to $ 5,935,643 as of December 31, 2024, and extends the maturity until October 14, 2032, at a variable interest rate of SOFR rate plus 1.7 % on an interest only basis for 2 years and amortizing on a thirty-year schedule for the balance of the term.

1 unchanged sentence

Line of Credit

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

Prior to the line’s expiration in 2020, the Partnership exercised its option for a one-year extension until October 31, 2021.

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

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

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

The loan covenants include a leverage ratio not to exceed 65 %, a debt service coverage ratio of not less than 1.5 to 1.0 , maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $ 15 million, and a minimum debt yield of 8.5 %.

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

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

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

As of December 31, 2024, the Partnership was in compliance with the financial covenants and did not incur an unused line fee.

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

The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

On October 29, 2021, t he Partnership closed on the modification of its existing line of credit.

The agreement extends the credit line for three years until October 29, 2024.

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

The modification period covered the current period and phased out on December 31, 2022.

During this 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;

from a maximum consolidated leverage ratio of 65 % to a ratio of 70 % until September 30, 2022 and from a minimum debt yield of 9.5 % to a yield of 8.5 % until September 30, 2022 and a yield of 9.0 % until December 31, 2022.

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 9.5 % to 8.6 %.

Consequently, as of December 31, 2023, the Partnership did not comply with the debt yield financial covenant.

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

The Partnership is currently in discussions with a Lender for a replacement line of credit.

See Note 19, SUBSEQUENT EVENTS, for additional information.

The interest rate for the new term was LIBOR plus 300 basis points.

The costs associated with the modification and renewal of the line of credit was approximately $ 179,000 .

On December 3, 2021, the Partnership paid off the outstanding balance of $ 17,000,000 on the Line of Credit.

After June 30, 2023, the remaining tenors of U.S.-dollar LIBOR ceased publication, prompting the need for an alternative benchmark rate.

On April 14, 2023, the partnership amended the line of credit to convert its base rate of interest from LIBOR to the Secured Overnight Financing Rate (SOFR) plus 10 basis points.

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

The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.

The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 23 of its subsidiary properties and joint ventures.

Pledged interests range from 49 % to 100 % of the Partnership’s ownership interest in the respective entities.

The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 27 of its Subsidiary Partnerships and Joint Ventures.

Pledged interests are 49 % of the Partnership’s ownership interest in the respective entities.

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

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

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

Partnership from 10-to-1 to 30-to-1 , such that each Depositary Receipt represents one-thirtieth ( 1 / 30 ) of a Class A Unit of the Partnership.

Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1 , such that each Depositary Receipt represents one-thirtieth ( 1 / 30 ) of a Class A Unit of the Partnership.

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

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

In 2023 the Partnership paid a total distribution of an aggregate $ 84.00 per Unit ($ 2.80 per Receipt) for a total payment of $ 9,954,888 .

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

In 2023 the Partnership paid a total distribution of an aggregate $ 84.00 per Unit ($ 2.80 per Receipt), for a total payment of $ 9,954,888 .

4 unchanged sentences

Distributions per Depositary Receipt

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

TREASURY UNITS

7 unchanged sentences

Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions.

From August 20, 2007 through December 31, 2023, the Partnership has repurchased 1,532,234 Depositary Receipts at an average price of $ 31.72 per receipt (or $ 951.52 per underlying Class A Unit), 4,394 Class B Units and 231 General Partnership Units, both at an average price of $ 1,259.00 per Unit, totaling approximately $ 54,421,000 including brokerage fees paid by the Partnership.

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

provided, however, that (i) the aggregate cost of Depositary Receipts and Partnership Units repurchased shall not exceed $5 million, (ii) no Depositary Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date hereof, (iii) no Depositary Receipt shall be repurchased( the “Repurchase Plan”);

The Repurchase Plan requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80 %, 19 % and 1 % fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership Agreement.

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

From August 20, 2007 through December 31, 2024, the Partnership has repurchased 1,550,358 Depositary Receipts at an average price of $ 31.82 per receipt (or $ 954.60 per underlying Class A Unit), 4,537 Class B Units and 239 General Partnership Units, both at an average price of $ 1,289.00 per Unit, totaling approximately $ 56,090,000 , inclusive of brokerage fees paid by the Partnership.

During the year ended December 31, 2024, the Partnership purchased a total of 18,124 Depositary Receipts.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

The average price was $ 73.55 per receipt or $ 2,206.50 per unit.

1 unchanged sentence

The Partnership was required to repurchase 143.48 Class B Units and 7.55 General Partnership units at a cost of $ 316,612 and $ 16,664 respectively.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

COMMITMENTS AND CONTINGENCIES

9 unchanged sentences

Aggregate contingent rentals from continuing operations were approximately $ 766,000 , $ 683,000 and $ 541,000 for the years ended December 31, 2024, 2023 and 2022 respectively.

Trader Joe’s and Walgreen’s, tenants at Staples Plaza and 653 Worcester Road, Framingham, MA.

Trader Joe’s and Blue Pearl, tenants at Staples Plaza and Walgreen’s, a tenant at 653 Worcester Road, Framingham, MA.

respectively, are approximately 32 % of the total commercial rental income.

17 unchanged sentences

Cash paid for state income taxes was approximately $ 147,000 , $ 66,000 and $ 65,000 during the years ended December 31, 2024, 2023 and 2022 respectively.

In 2022, 5 properties were involved in a non-cash financing activity of approximately $ 43,000,000 In 2021, 11 properties were involved in a non-cash financing activity of approximately $ 65,000,000 .

In 2024, the Partnership acquired construction in progress through accounts payable and accruals, which represented a non-cash investing activity of approximately $2,774,000.

In 2022, 5 properties were involved in a non-cash financing activity of approximately $ 43,000,000 .

Interest capitalized amounted to approximately $ 183,000 for the year ended December 31,2024, with no capitalized interest recorded for the years ended December 31, 2023 and 2022.

FAIR VALUE MEASUREMENTS

4 unchanged sentences

The Partnership considers all highly liquid investments purchased with original maturities of three months or less at the time of purchase to be cash equivalents.

Cash, cash equivalents, and restricted cash include cash held in checking, U.S.

Treasury Bills, and money market accounts.

The Partnership has investments in Treasury Bills some of which mature over a period greater than 90 days and are

Cash, cash equivalents, and restricted cash include cash held in checking,

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

classified as short-term investments.

Treasury Bills, and money market accounts.

The Partnership has investments in Treasury Bills some of which mature over a period greater than 90 days and are classified as short-term investments.

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

23 unchanged sentences

*Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2023 and 2022.

Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

since December 31, 2023 and current estimates of fair value may differ significantly from the amounts presented herein.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2024 and 2023.

Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2024 and current estimates of fair value may differ significantly from the amounts presented herein.

DERIVATIVE FINANCIAL INSTRUMENTS

36 unchanged sentences

( 15,045,477 )

TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners’ tax returns is different than financial statement income because of different depreciation methods, different tax lives, other items with limited tax deductibility carryovers and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions.

Federal taxable income of approximately $ 9,989,000 was approximately $ 1,535,000 more than statement

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

DECEMBER 31, 2024

income for the year ended December 31, 2023.

TAXABLE INCOME AND TAX BASIS

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

The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2024 is approximately $ 10,000,000 less than the statement basis.

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

The Partnership’s Federal tax basis in its joint venture investments is approximately $ 6,000,000 more than statement basis.

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

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

82 unchanged sentences

This investment is referred to as Hamilton Minuteman, LLC.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2024

In August 2004, the Partnership invested $ 8,000,000 for a 50 % ownership interest in a 280 -unit apartment complex located in Watertown, Massachusetts.

2 unchanged sentences

The assets were combined with Hamilton on Main Apartments.

Hamilton on Main Apartments, LLC is known as Hamilton Place.

In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained.

The mortgage was $ 16,825,000 , with interest only of 5.18 % for three years and amortizing on a 30 year schedule for the remaining seven years when the balance was due.

The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $ 16,700,000 , which were used to reduce the existing mortgage.

Hamilton on Main, LLC is known as Hamilton Place.

In August 2014, the property was refinanced with a 10 year mortgage in the amount of $ 16,900,000 at 4.34 % interest only.

1 unchanged sentence

The costs associated with the refinancing were approximately $ 161,000 .

At December 31, 2023, the balance of the mortgage before unamortized deferred financing costs is approximately $ 16,900,000 .

In 2018, the carrying value of the investment fell below zero .

The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed.

The investment is referred to as Hamilton On Main Apartments, LLC.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2023

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.

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

On March 8, 2024, the Borrower received notice from KeyBank that it was providing ex-post facto consent to the transfer of interest subject to certain conditions being met by the Borrower.

The Partnership’s share of costs associated with the transfer of interests in the Borrower is approximately $ 107,000 .

The Partnership’s share of costs associated with the transfer of interests in the Borrower was approximately $ 107,000 .

On April 18, 2024 the Borrower and KeyBank executed amended loan documents reflecting the transfer of interest in the Borrower.

In conjunction with the execution of the amended loan documents, KeyBank provided a courtesy reduction equal to 50 % of the transfer fee.

In August 2024, the property was refinanced with a 10 year mortgage in the amount of $ 23,589,000 at 5.425 % interest only.

The Joint Venture paid off the prior mortgage of approximately $ 16,900,000 with the proceeds of the new mortgage and distributed $ 2,000,000 to the Partnership.

The costs associated with the refinancing were approximately $ 243,000 .

In 2018, the carrying value of the investment fell below zero .

At December 31, 2024, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

The investment is referred to as Hamilton on Main LLC.

In November 2001, the Partnership invested approximately $ 1,533,000 for a 50 % ownership interest in a 40 -unit apartment building in Cambridge, Massachusetts.

40 unchanged sentences

Total units/condominiums

Units to be retained

Units to be sold

Units sold through February 1, 2024

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

61 unchanged sentences

Total units/condominiums

Units to be retained

Units to be sold

Units sold through February 1, 2023

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

15 unchanged sentences

Other Expenses

Interest income

( 5,014,215 )

35 unchanged sentences

Total units/condominiums

Units to be retained

Units to be sold

Units sold through February 1, 2022

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

18 unchanged sentences

Net Income (Loss)

( 2,036,964 )

( 1,542,005 )

Net Income (Loss)—NERA 50 %

9 unchanged sentences

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures ("ASU 2023-07").

The guidance requires incremental disclosures related to a public entity’s reportable segments.

ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted.

The Partnership is currently evaluating the impact of adopting ASU 2023-07 will have on the Partnership's consolidated financial statements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued a new standard on disaggregation of income statement expenses, which requires an entity to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in a tabular format in the notes to the financial statements.

The standard will be effective for annual reporting periods beginning after December 15, 2026 and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively.

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

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

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

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

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

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

QUARTERLY FINANCIAL DATA (UNAUDITED)

27 unchanged sentences

Net Income Per Depositary Receipt

NOTE 19—SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

From January 1, 2025 through March 12, 2025, the Partnership has purchased 84 Depository Receipts .

1 unchanged sentence

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

The Partnership is currently in negotiations with a lender or a replacement line of credit.

NOTE 20—QUALIFYING ACCOUNTS

QUALIFYING ACCOUNTS

New England Realty Associates Limited Partnership

11 unchanged sentences

(a) Uncollectible accounts written off

SEGMENT REPORTING

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”).

The CODM determines how resources should be allocated and assesses performance on a regular basis.

The Partnership’s CODM is the Partnership’s Treasurer and Director.

The Partnership operates as a single business segment, focusing on the ownership, operation and development of its multifamily and commercial real estate portfolio located in the city of Boston, surrounding suburbs, and southern New Hampshire.

For a description of the types of products and services from which this single reportable segment derives its revenues, see Notes 1 and 2.

The CODM is regularly provided with financial reporting packages which include the financial statements presented herein.

The CODM evaluates the performance of the Partnership on a consolidated basis, based upon consolidated Income Before Other Income (Expense), to make decisions about the Partnership’s operations and resource allocation.

Consolidated Income Before Other Income (Expense) is used to monitor budget versus actual results.

The significant expenses of the Partnership are presented within the Consolidated Statements of Income.

The CODM manages our portfolio as a whole and decisions regarding investments are made collectively based on the inputs above.

Accordingly, the Partnership consists of a single operating and reportable segment and the consolidated financial statements and notes thereto are presented as a single reportable segment.

Since the Partnership operates in a single segment, the segment information is consistent with the consolidated statements of operations and comprehensive income (loss).

Therefore, no reconciliation is necessary.

EXHIBIT INDE X

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New England Realty Associates Limited Partnership Clawback Policy

Combined Financial Statements of Significant Subsidiaries

The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-K for the year ended December 31, 2024 formatted in Inline XBRL:

80 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-K

Item 9A. Controls and Procedures