What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-08 · 80 added, 114 removed, 204 unchanged (49% of the section changed)

9 unchanged sentences

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

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

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

Currently, $58,032,000 of these reserves are invested in short-term US Treasury bills maturing in 6 months or less with interest rates between 4.19% and 4.37%.

2 unchanged sentences

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

On July 14, 2023, the Partnership purchased a mixed use property in the South End neighborhood of Boston, Massachusetts 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, 2024 was 1.7% as compared with a vacancy rate of 0.9% as of November 1, 2023.

The vacancy rate for the Joint Venture properties as of November 1, 2024 was 2.8%, as compared to 0.7% for the same period last year.

The vacancy rate for the Partnership’s residential properties as of May 1, 2025 was 1.6% as compared with a vacancy rate of 1.2% as of May 2, 2024.

The vacancy rate for the Joint Venture properties as of May 1, 2025 was 2.0%, as compared to 1.3% for the same period last year.

Residential tenants generally have lease terms of 12 months.

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

During the third quarter of 2024, rents increased an average of 5.4% for renewals and increased an average of 4.6% for new leases.

For the balance of 2024, management expects a rental market with continued but moderating rent growth.

For the third quarter of 2024, consolidated revenue increased by 6.6%, operating expenses decreased by 2.3%, and Income before Other Income (Expense) increased by 32.1%, as compared to the third quarter of 2023.

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.

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 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 phased out as of 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.

As of September 30, 2024, the portfolio’s debt yield achieved the minimum of 9.5%, and the Partnership complied with all financial covenants.

The line of credit expired on October 29,2024.The Partnership is currently in discussions with a lender for a replacement line of credit.

From the start of the Stock Repurchase Program in 2007 through September 30, 2024, the Partnership has purchased 1,549,824 Depositary Receipts.

During the nine months ended September 30, 2024, the Partnership purchased a total of 17,590 Depositary Receipts.

During the first quarter of 2025, rents increased an average of 6.0% for renewals and decreased an average of 0.2% for new leases.

For the balance of 2025, management expects a rental market with slowing rent growth.

For the first quarter of 2025, consolidated revenue increased by 4.0%, operating expenses increased by 2.2%, and Income before Other Income (Expense) increased by 8.4%, as compared to the first quarter of 2024.

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 for 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 March 31,2025, the Partnership was in compliance with the financial covenants and did not incur an unused line fee.

From the start of the Stock Repurchase Program in 2007 through March 31, 2025, the Partnership has purchased 1,550,442 Depositary Receipts.

During the three months ended March 31, 2025, the Partnership purchased a total of 84 Depositary Receipts.

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

On March 12, 2025, the Board of Directors unanimously approved a new extension to the Repurchase Program, authorizing 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, Depository Receipts and Partnership Units such that (i) the aggregate cost of Depository Receipts and Partnership Units repurchased shall not exceed the lesser of $5 million or 10% of the Partnership’s balance of cash and investment in treasury bills, (ii) no Depository Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date of the plan, and (iii) no Depository Receipts or Partnership Units shall be repurchased in excess of $95 per Depository Receipt.

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.

This repurchase authorization replaces the Partnership’s previous repurchase program.

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.

On February 24, 2019, Harold Brown, the owner of 75% of the outstanding voting securities of NewReal, Inc.

2 unchanged sentences

On January 2, 2024, the estate was settled, with Jameson Brown and Harley Brown each assuming 37.5% ownership in NewReal.

As of November 1, 2024, the Brown family related entities and Ronald Brown collectively own approximately 32.4% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members).

As of May 1, 2025, the Brown family related entities and Ronald Brown collectively own approximately 34.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members).

Brown family related entities also control 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, the Partnership’s sole general partner.

2 unchanged sentences

Moreover, 75% of the issued and outstanding Class B units of the Partnership are owned by HBC Holdings LLC, an entity of which Jameson Brown is the manager.

The outstanding stock of The Hamilton Company, Inc.

is controlled by Jameson Brown and Harley Brown.

The outstanding stock of The Hamilton Company is controlled by Jameson Brown and Harley Brown.

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

2 unchanged sentences

Residential tenants sign a one year lease.

During the nine months ended September 30, 2024, tenant renewals were approximately 67% with an average rental increase of approximately5.8%, new leases accounted for approximately 33% with rental rate increases of approximately5.3%.

During the nine months ended September 30, 2024, leasing commissions were approximately $522,000 compared to approximately $459,000 for the nine months ended September 30, 2023, an increase of approximately $63,000 (13.7%).

Tenant concessions were approximately $92,000 for the nine months ended September 30, 2024, compared to approximately $66,000 for the nine months ended September 30, 2023, an increase of approximately $26,000 (39.4%).

Tenant improvements were approximately $2,503,000 for the nine months ended September 30, 2024, compared to approximately $2,641,000 for the nine months ended September 30, 2023, a decrease of approximately $138,000 (5.2%).

Hamilton accounted for approximately 1.0% of the repair and maintenance expenses paid for by the Partnership during the nine months ended September 30, 2024 and 1.8% during the nine months ended September 30, 2023.

During the three months ended March 31, 2025, tenant renewals were approximately 69% with an average rental increase of approximately 6.0%, new leases accounted for approximately 31% with a rental rate decrease of approximately 0.2%.

During the three months ended March 31, 2025, leasing commissions were approximately $145,000 compared to approximately $118,000 for the three months ended March 31, 2024, an increase of approximately $27,000 (22.9%).

Tenant concessions were approximately $16,000 for the three months ended March 31, 2025, compared to approximately $76,000 for the three months ended March 31, 2024, a decrease of approximately $60,000 (78.9%).

Tenant improvements were approximately $871,000 for the three months ended March 31, 2025, compared to approximately $765,000 for the three months ended March 31, 2024, an increase of approximately $106,000 (13.9%).

Hamilton accounted for approximately 1.2% of the repair and maintenance expenses paid for by the Partnership during the three months ended March 31, 2025 and 0.8% during the three months ended March 31, 2024.

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.

3 unchanged sentences

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

Overall, Hamilton provided approximately $138,000 (46.4%) and approximately $199,000 (71.9%) of the legal services paid for by the Partnership during the nine months ended September 30, 2024 and 2023 respectively.

Overall, Hamilton provided approximately $32,000 (82.8%) and approximately $50,000 (61.6%) of the legal services paid for by the Partnership during the three months ended March 31, 2025 and 2024 respectively.

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

3 unchanged sentences

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

During the nine months ended September 30, 2024, Hamilton provided the Partnership approximately $420,000 in construction and architectural services, compared to approximately $563,000 for the nine months ended September 30, 2023.

During the three months ended March 31, 2025, Hamilton provided the Partnership approximately $96,000 in construction and architectural services, compared to approximately $105,000 for the three months ended March 31, 2024.

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

During the nine months ended September 30, 2024 and 2023, Hamilton charged the Partnership $93,750 for bookkeeping and accounting services.

During the three months ended March 31, 2025 and 2024, Hamilton charged the Partnership $31,250 for bookkeeping and accounting services.

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

19 unchanged sentences

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

If both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the predominant component.

Partnership elected an allowed practical expedient.

If both the timing and pattern of transfer are the

same for the non-lease component and related lease component, the lease component is the predominant component.

The Partnership elected an allowed practical expedient.

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

30 unchanged sentences

On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties may be impaired.

A property’s value is impaired only if management’s estimate of the

aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property.

A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property.

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

2 unchanged sentences

Investments in Treasury Bills:

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

The carrying value of the Treasury Bills are adjusted for accretion of discounts over the remaining life of the investment.

Investments in U.S.

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

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

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

Management has reclassified the Treasury Bills to “available for sale”, as they may be sold in conjunction with the upcoming purchase of the Hill Estate Properties.

See subsequent events Note 19.

The carrying value approximates fair value.

Investments in Joint Ventures:

19 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended September 30, 2024 and September 30, 2023

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $6,470,000 during the three months ended September 30, 2024, compared to approximately $4,899,000 for the three months ended September 30, 2023, an increase of approximately $1,571,000 (32.1%).

Three Months Ended March 31, 2025 and March 31, 2024

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $6,233,000 during the three months ended March 31, 2025, compared to approximately $5,751,000 for the three months ended March 31, 2024, an increase of approximately $482,000 (8.4%).

The rental activity is summarized as follows:

Occupancy Date

November 1, 2024

November 1, 2023

Total square feet

Rental Income (in thousands)

Three Months Ended September 30,

Three Months Ended March 31,

Residential percentage

1 unchanged sentence

Contingent rentals

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023:

Three Months Ended September 30,

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024:

Three Months Ended March 31,

Rental income

10 unchanged sentences

Income from investments in unconsolidated joint ventures

Rental income for the three months ended September 30, 2024 was approximately $20,021,000, compared to approximately $18,804,000 for the three months ended September 30, 2023, an increase of approximately $1,217,000 (6.5%).

The Partnership properties with the largest increases in rental income include 659 Worcester Road, Shawmut Place, Hamilton Oaks, Mill Street Gardens, 62 Boylston Street, and Westgate Apartments, with increases of $156,000, $120,000, $100,000, $100,000, $97,000 and $92,000 respectively.

Rental income for the three months ended March 31, 2025 was approximately $20,496,000, compared to approximately $19,710,000 for the three months ended March 31, 2024, an increase of approximately $786,000 (4.0%).

The Partnership properties with the largest increases in rental income include Hamilton Oaks, Westgate Apartments, WCB Associates, Redwood Hills, Hamilton Green Apartments, and 62 Boylston Street, and with increases of $134,000, $96,000, $94,000, $83,000, $76,000 and $72,000 respectively.

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

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

Operating expenses for the three months ended September 30, 2024 were approximately $13,738,000 compared to approximately $14,062,000 for the three months ended September 30, 2023, a decrease of approximately $324,000 (2.3%).

The factors contributing to the decrease are a decrease in depreciation and amortization expense of approximately $202,000 (4.6%), a decrease in operating expenses of approximately $100,000 (6.2%), and a decrease in taxes and insurance of approximately $74,000 (2.9%).

Interest expense for the three months ended September 30, 2024 was approximately $3,831,000 compared to approximately $3,956,000 for the three months ended September 30, 2023, a decrease of approximately $125,000 (3.2%).

Interest and dividend income for the three months ended September 30, 2024 was approximately $1,123,000 compared to approximately $1,083,000 for the three months ended September 30, 2023, an increase of approximately $40,000 (3.7%).

Expenses for the three months ended March 31, 2025 were approximately $14,455,000 compared to approximately $14,141,000 for the three months ended March 31, 2024, an increase of approximately $314,000 (2.2%).

The factors contributing to the increase are an increase in operating expenses of approximately $633,000 (23.9%),which included an increase in snow removal $464,000 and heating expense $262,000 an increase in taxes and insurance of approximately $213,000 (8.6%), partially offset by a decrease in depreciation and amortization expense of approximately $323,000 (7.6%).

Interest expense for the three months ended March 31, 2025 was approximately $3,791,000 compared to approximately $3,907,000 for the three months ended March 31, 2024, a decrease of approximately $116,000 (3.0%).

Interest and dividend income for the three months ended March 31, 2025 was approximately $991,000 compared to approximately $1,177,000 for the three months ended March 31, 2024, a decrease of approximately $186,000 (15.8%).

Interest income is from investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.19% to 4.37%.

At September 30 2024, 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 $147,000 for the three months ended September 30, 2024, compared to net income of approximately $149,000 for the three months ended September 30, 2023, a decrease in income of approximately $2,000 (1.3%).

Included in the income for the three months ended September 30, 2024 is depreciation and amortization expense of approximately $657,000.

As a result of the changes discussed above, net income for the three months ended September 30, 2024 was approximately $3,909,000 compared to net income of approximately $2,175,000 for the three months ended September 30, 2023, an increase in income of approximately $1,734,000 (79.7%).

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $18,760,000 during the nine months ended September 30, 2024, compared to approximately $14,089,000 for the nine months ended September 30, 2023, an increase of approximately $4,671,000 (33.2%).

Nine Months Ended September 30,

Rental income

Laundry and sundry income

Administrative

Depreciation and amortization

Management fee

Repairs and maintenance

Taxes and insurance

Income Before Other Income ( Expense)

Other Income (Expense)

Interest income

Interest expense

Income from investments in unconsolidated joint ventures

Rental income for the nine months ended September 30, 2024 was approximately $59,573,000, compared to approximately $54,338,000 for the nine months ended September 30, 2023, an increase of approximately $5,235,000 (9.6%).

Excluding revenues from Shawmut Apartments of approximately $1,305,000, revenue increased approximately $3,930,000 (7.2%).The Partnership properties with the largest increases in rental income include Hamilton Oaks, 62 Boylston, 1144 Commonwealth, Mill Street Gardens, 659 Worcester Road, and Westgate Apartments, with increases of $419,000, $395,000, $342,000, $306,000, $292,000 and $233,000, respectively.

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

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

Operating expenses for the nine months ended September 30, 2024 were approximately $41,392,000 compared to approximately $40,665,000 for the nine months ended September 30, 2023, an increase of approximately $727,000 (1.8%), Excluding operating costs for Shawmut Apartments of approximately $1,059,000, operating expenses decreased approximately $332,000 (0.8%).

The factors contributing to the decrease are a decrease in depreciation and amortization expense of approximately $317,000 (2.7%), a decrease in administrative expenses of approximately $153,000 (6.8%), and a decrease in operating expenses of approximately $120,000 (2.1%).

Interest income for the nine months ended September 30, 2024 was approximately $3,414,000 compared to approximately $3,350,000 for the nine months ended September 30, 2023, an increase of approximately $63,000 (1.9%).

Interest expense for the nine months ended September 30, 2024 was approximately $11,638,000 compared to approximately $11,781,000 for the nine months ended September 30, 2023, a decrease of approximately $144,000 (1.2%).

At September 30, 2024, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

At March 31 2025, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties.

As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $909,000 for the nine months ended September 30, 2024, compared to net income of approximately $496,000 for the nine months ended September 30, 2023, an increase in income of approximately $413,000 (83.3%).This increase is primarily due to an increase in rental revenue of approximately $ 8,692,000 for the nine months ended September 30, 2024 from approximately $8,176,000 for the nine months ended September 30, 2023, an increase of approximately $516,000 (6.3%).

Included in the income for the nine months ended September 30, 2024 is depreciation and amortization expense of approximately $1,948,000.

As a result of the changes discussed above, net income for the nine months ended September 30, 2024 was approximately $11,446,000 compared to income of approximately $6,155,000 for the nine months ended September 30, 2023, an increase in net income of approximately $5,291,000 (86.0%).

As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $362,000 for the three months ended March 31, 2025, compared to net income of approximately $441,000 for the three months ended March 31, 2024, a decrease in income of approximately $79,000 (17.8%).

Included in the income for the three months ended March 31, 2025 is depreciation and amortization expense of approximately $651,000.

As a result of the changes discussed above, net income for the three months ended March 31, 2025 was approximately $3,796,000 compared to net income of approximately $3,463,000 for the three months ended March 31, 2024, an increase in income of approximately $332,000 (9.6%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first nine months of 2024 and 2023 was the collection of rents.

The Partnership’s principal use of cash during the first nine months of 2024 was the construction of the Mill Street Development, improvements to rental properties, mortgage principal payments, purchases of U.S.

The Partnership’s principal source of cash during the first three months of 2025 and 2024 was the collection of rents.

The Partnership’s principal use of cash during the first three months of 2025 was the construction of the Mill Street Development, improvements to rental properties, mortgage principal payments, purchases of U.S.

Treasury bills, and distributions to partners.

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 $15,069,693 at September 30, 2024 and $18,230,463 at December 31, 2023 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $3,160,770 for the nine months ended September 30, 2024 is summarized as follows:

Nine Months Ended September 30,

The majority of cash and cash equivalents of $30,863,737 at March 31, 2025 and $17,615,940 at December 31, 2024 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $13,247,797 for the three months ended March 31, 2025 is summarized as follows:

Three Months Ended March 31,

Cash provided by operating activities

Cash (used in) provided by investing activities

Purchase of rental property

Cash provided by investing activities

Principal payments of mortgage notes payable

1 unchanged sentence

Distributions paid

Net (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

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

The net decrease in cash used in investing activities is primarily for the improvement of rental properties, including the Mill Street Development project.

The net increase in cash used in investing activities is primarily for the improvement of rental properties, including the Mill Street Development project, offset by the proceeds of U.S.

Treasury bills.

Financing activities include mortgage principal payments and distributions to partners, and repurchase of depositary receipts.

2 unchanged sentences

Cash reserves have been adequate to fully fund improvements.

Cash reserves used for the Mill Street Development Project were approximately $7,962,000.

Beyond the Mill Street Development Project, the most significant improvements were made at Executive Apartments, 1144 Commonwealth, River Drive Apartments, Redwood Hills, Hamilton Oaks, and Westgate Woburn at a cost of approximately $1,339,000, $960,000, $871,000, $844,000, $656,000 and $322,000 respectively.

During the nine months ended September 30, 2024, the Partnership received distributions of approximately $3,972,500, from the investment properties.

For the nine months ended September 30, 2023, the Partnership received $3,033,500 in distributions from the investment properties.

Included in these net distributions is the amount from both Hamilton on Main of approximately $2,000,000 and $430,000 and Dexter Park of approximately $1,340,000 and $1,492,000 for the nine months ended September 30, 2024 and 2023, respectively.

Cash reserves used for the Mill Street Development Project were approximately $6,233,000 for the three months ended March 31,2025.

Beyond the Mill Street Development Project, the most significant improvements were made at Residences at Captain Parker, North Beacon apartments, Redwood Hills, Hamilton Oaks, Commonwealth 1144, and School Street at a cost of approximately $589,000, $246,000, $239,000, $181,000, $129,000 and $98,000 respectively.

During the three months ended March 31, 2025, the Partnership received distributions of approximately $482,000 from the investment properties.

For the three months ended March 31, 2024, the Partnership received $577,000 in distributions from the investment properties.

Included in these net distributions is the amount from Dexter Park of approximately $200,000 .

The decrease in distributions from the investment properties relates to the refinancing of Hamilton on Main in September of 2024,which increased quarterly mortgage interest expense.

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

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

In May 2024, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on June 28, 2024.

In August 2024, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on September 28, 2024.

In May 2025, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on May 30, 2025 .

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

The Partnership anticipates that the Mill Street Development project will require approximately $30 million in spending over the next two years, with approximately $10 million to be spent in 2024 and approximately $20 million to be spent in 2025.

The Partnership anticipates that the Mill Street Development project will require approximately $30.3 million to be spent over the two year period, with approximately $15 million spent in 2024 and approximately $15.3 million to be spent in 2025.

The partnership is using cash reserves to fund this construction but will finance a portion of construction costs upon completion of the project.

Construction is expected to be completed during the fourth quarter of 2025 .

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of September 30, 2024, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

As of March 31, 2025, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness.

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

At September 30, 2024, our proportionate share of the non-recourse debt related to these investments was approximately $73,946,000.

As March 31, 2025,our proportionate share of the non-recourse debt related to these investments was approximately $73,885,000.

See Note 15 to the Consolidated Financial Statements.

Contractual Obligations

As of September 30, 2024, we are subject to debt obligations as described in the table below.

As of March 31, 2025, we are subject to debt obligations as described in the table below.

Payments due by period

Debt Obligations

Contractual Obligations

Long -term debt

Mortgage debt

Total Debt Obligations

Total Contractual Obligations

* Excluding unamortized deferred financing costs

As of September 30, 2024, the Partnership has one property under construction located at 57 Mill Street in Woburn, MA.

As of March 31, 2025, the Partnership has one property under construction located at 57 Mill Street in Woburn, MA.

The project includes 72 residential units comprising approximately 93,000 square feet, and is estimated to be completed during the fourth quarter of 2025.

Total investment to date is approximately $8.4 million, and the total investment upon completion is anticipated to be approximately $30 million .

The partnership is using cash reserves to fund this construction, but will finance a portion of construction costs upon completion of the project.

Total investment to date is approximately $23 million, and the total investment upon completion is anticipated to be approximately $33 million .The partnership is using cash reserves to fund this construction, but will finance a portion of construction costs upon completion of the project.

In connection with the Mill Street development project, the Partnership has entered into a contract with a general contractor with a current contract value of approximately $30.3 million.

38 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis