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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 205 added, 137 removed, 637 unchanged (35% of the section changed)

6 unchanged sentences

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in New England Realty Associates L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

The results of operations for the three month period ended March 31, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

The results of operations for the three and six month periods ended June 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

1 unchanged sentence

Rental Properties

Real Estate Assets Held for Sale

Cash and Cash Equivalents

15 unchanged sentences

( 62,433,902 )

Total Liabilities and Partners’ Capital

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Rental income

11 unchanged sentences

( 3,899,695 )

( 7,927,588 )

( 7,806,711 )

Income from investments in unconsolidated joint ventures

1 unchanged sentence

( 2,465,438 )

( 5,351,422 )

( 4,753,615 )

Net Income per Unit

3 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

Other comprehensive (loss) income :

Three Months Ended

Six Months Ended

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

Comprehensive income

See notes to consolidated financial statements.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

Partners' Capital

Comprehensive

Partner’s Capital

Comprehensive Income

Balance January 1, 2024

7 unchanged sentences

Stock Buyback

Net unrealized income on derivative instruments for interest rate swaps

Balance March 31 , 2024

Net unrealized gain on derivative instruments for interest rate swaps

Balance June 30 , 2024

( 53,949,836 )

11 unchanged sentences

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

Balance March 31, 2025

Balance June 30, 2025

( 55,381,970 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

8 unchanged sentences

Proceeds from unconsolidated joint ventures

Decrease in rents receivable

(Increase) in rents receivable

(Decrease) in accounts payable and accrued expense

1 unchanged sentence

Decrease (Increase) in real estate tax escrow

Decrease in prepaid expenses and other assets

Increase (Decrease) in advance rental payments and security deposits

Decrease (Increase) in prepaid expenses and other assets

( 1,349,617 )

Increase in advance rental payments and security deposits

Total Adjustments

11 unchanged sentences

( 4,185,791 )

Purchase of rental property

( 108,885,341 )

Improvement of rental properties

1 unchanged sentence

( 4,942,577 )

Net cash provided by investing activities

Net cash (used in) provided by investing activities

( 40,919,964 )

( 5,517,101 )

Cash Flows from Financing Activities

Principal payments of mortgage notes payable

( 20,482,614 )

( 1,392,912 )

Proceeds from Mortgage Notes Payable

Stock buyback

2 unchanged sentences

( 8,443,134 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

( 10,737,170 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 4,767,169 )

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, at beginning of period

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

SIGNIFICANT ACCOUNTING POLICIES

91 unchanged sentences

Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets.

In all cases, amortization of such costs is included in interest expense and was approximately $ 95,000 and $ 95,000 for the three months ended March 31, 2025 and 2024, respectively.

In all cases, amortization of such costs is included in interest expense and was approximately $ 211,000 and $ 190,000 for the six months ended June 30, 2025 and 2024, respectively.

Derivative Instruments:

13 unchanged sentences

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.

Segment Reporting:

3 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 $ 130,000 and comprehensive income of approximately $142,000 for the three months ended March 31, 2025 and 2024, respectively.

NERA had a comprehensive loss of approximately $194,000 and comprehensive income of approximately $175,000 for the six months ended June 30, 2025 and 2024, respectively.

Income (Loss) Per Depositary Receipt:

9 unchanged sentences

The Partnership makes its temporary cash investments with high-credit quality financial institutions.

At March 31, 2025, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01 % to 4.3 %.

At March 31, 2025 and December 31, 2024, respectively, approximately $ 35,065,000 , and $ 16,551,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

At June 30, 2025, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01 % to 3.55 %.

At June 30, 2025 and December 31, 2024, respectively, approximately $ 18,542,000 , and $ 16,551,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense:

Advertising is expensed as incurred.

Advertising expense was approximately $ 98,000 and $ 152,000 for the three months ended March 31, 2025, and 2024, respectively .

Advertising expense was approximately $ 160,000 and $ 177,000 for the six months ended June 30, 2025, and 2024, respectively .

Rental Property Held f or Sale:

2 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.

As of June 30,2025,the Partnership has designated two properties, located at 26 Brighton Avenue, and 90 Concord Avenue, in Belmont, Massachusetts with a value of approximately $3,000,000 as properties held for sale.

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 three months ended March 31, 2025 there was capitalized interest of approximately $ 149,000 .

During the six months ended June 30, 2025 there was capitalized interest of approximately $ 360,000 .

Extinguishment of Debt:

5 unchanged sentences

RENTAL PROPERTIES

As of March 31, 2025, the Partnership and its Subsidiary Partnerships owned 2,943 residential apartment units in 27 residential and mixed-use complexes (collectively, the “Apartment Complexes”).

As of June 30, 2025, the Partnership and its Subsidiary Partnerships owned 3,339 residential apartment units in 28 residential and mixed-use complexes (collectively, the “Apartment Complexes”).

The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”).

The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of March 31, 2025, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline and commercial space in mixed-use properties in Boston, Brockton and Newton, all in Massachusetts.

Additionally, as of June 30, 2025, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline, commercial space in mixed-use properties in Boston, Brockton, Belmont and Newton, and two commercial office buildings in Belmont, all in Massachusetts.

These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40 % to 50 % ownership interest in seven residential and mixed use complexes (the “Investment Properties”) at March 31, 2025 with a total of 688 apartment units, accounted for using the equity method of consolidation.

The Partnership also owned a 40 % to 50 % ownership interest in seven residential and mixed use complexes (the “Investment Properties”) at June 30, 2025 with a total of 688 apartment units, accounted for using the equity method of consolidation.

See Note 15 for summary information on these investments.

On June 18, 2025, the Partnership, through its subsidiaries, purchased a mixed-use property comprising 396 residential units and 3 commercial units in Belmont, Massachusetts for $ 172,000,000 .

Closing costs were approximately $ 218,000 .

Additionally, the Partnership, through its subsidiaries, purchased two commercial properties for $ 3,000,000 in Belmont, Massachusetts.

The property acquisitions were financed through proceeds from the sale of U.S.

Treasury bills, additional borrowings on the Master Credit Facility of $ 40,000,000 , and proceeds of an interim mortgage loan of $ 67,500,000 .

From the purchase price, the Partnership allocated approximately $ 4,714,000 for in-place leases, approximately $ 305,000 to the value of tenant relationships and $ 1,165,000 to the value of below-market leases.

These amounts are being amortized over 12 and 36 months respectively.

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.

5 unchanged sentences

The current contract value including change orders is approximately $ 30.7 million.

It is anticipated that approximately $ 15,300,000 will be incurred in 2025.

As of March 31, 2025, 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 $ 23,195,000 million, and the total investment upon completion is anticipated to be approximately $ 33 million, including soft costs, imputed interest, and taxes.

As of June 30, 2025, 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 $ 28,101,000 , and the total investment upon completion is anticipated to be approximately $ 33 million, including soft costs, imputed interest, and taxes.

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.

1 unchanged sentence

Rental properties consist of the following:

March 31, 2025

June 30, 2025

December 31, 2024

15 unchanged sentences

(the “Management Company”), an entity that is owned by the majority shareholders of NewReal, Inc., the general partner of the Partnership (the “General Partner”).

The management fee is equal to 4 % of gross receipts of rental revenue and laundry income on the majority of the Partnership’s properties and 3 % on Linewt.

Total fees paid were approximately $ 818,000 and $ 789,000 for the three months ended March 31, 2025 and 2024, respectively.

The management fee is equal to 4 % of gross receipts of rental revenue and laundry income on the majority of the Partnership’s properties and 3 % on Linewt and Hill Estates.

Total fees paid were approximately $ 1,653,000 and $ 1,571,000 for the six months ended June 30, 2025 and 2024, respectively.

The Partnership Agreement permits the General Partner or the Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA.

During the three months ended March 31, 2025 and 2024, approximately $ 195,000 and $ 206,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements.

During the six months ended June 30, 2025 and 2024, approximately $ 417,000 and $ 568,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements.

Of the 2025 expenses referred to above, approximately $ 78,000 consisted of repairs and maintenance, and $ 110,000 for administrative expense.

Approximately $ 96,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties.

Approximately $ 225,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties, and approximately $ 4,000 for brokerage fees.

Additionally in 2025, the Hamilton Company received approximately $ 444,000 from the Investment Properties of which approximately $ 385,000 was the management fee, approximately $ 35,000 for construction, architectural services, and supervision of capital projects, approximately $ 21,000 for repairs and maintenance, and approximately $ 3,000 for legal expense.

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

The management fee is equal to 4 % of gross receipts of rental income on the majority of the investment properties, 3 % on Hill Estates, and 2 % on Dexter Park.

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

Total reimbursement was approximately $ 1,074,000 and $ 1,100,000 for the three months ended March 31, 2025 and 2024, respectively.

Total reimbursement was approximately $ 2,255,000 and $ 2,086,000 for the six months ended June 30, 2025 and 2024, respectively.

The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law.

The plan also provides for discretionary contributions by the employer.

For the three months ended March 31, 2025, the Partnership accrued $ 16,000 for the employer’s match portion to the plan.

For the three months ended March 31, 2024, the Partnership contributed $ 16,000 for the employer’s match portion to the plan .

For the six months ended June 30, 2025, the Partnership incurred $ 32,000 for the employer’s match portion to the plan.

For the six months ended June 30, 2024, the Partnership incurred $ 32,000 for the employer’s match portion to the plan .

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people.

During the three months ended March 31, 2025 and 2024 the Management Company charged the Partnership $ 31,250 ($ 125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

During the three months ended June 30, 2025 and 2024 the Management Company charged the Partnership $ 62,500 ($ 125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

Sally Michael is a Director of New Real, Inc., and she is a Partner at Saul Ewing Arnstein & Lear LLP.

Saul Ewing billed the Partnership for legal fees totaling approximately $ 9,000 and $ 46,000 for the three months ended March 31, 2025 and 2024, respectively.

David Reier is a Director of New Real, Inc., who billed the Partnership approximately $ 2,000 for legal fees for the period ending March 31,2025.

Saul Ewing billed the Partnership for legal fees totaling approximately $ 275,000 and $ 70,000 for the six months ended June

30, 2025 and 2024, respectively.

David Reier is a Director of New Real, Inc., who billed the Partnership approximately $ 6,000 for legal fees for the period ending June 30, 2025.

The Partnership has invested in seven limited partnerships, which have invested in mixed use residential apartment complexes.

4 unchanged sentences

PREPAID EXPENSES and OTHER ASSETS

Approximately $ 3,543,000 , and $ 3,463,000 of security deposits are included in prepaid expenses and other assets at March 31, 2025 and December 31, 2024, respectively.

Also, included in prepaid expenses and other assets at March 31, 2025 and December 31, 2024 is approximately $ 2,379,000 and $ 2,260,000 , respectively, held in escrow to fund future capital improvements.

Approximately $ 3,658,000 , and $ 3,463,000 of security deposits are included in prepaid expenses and other assets at June 30, 2025 and December 31, 2024, respectively.

Also, included in prepaid expenses and other assets at June 30, 2025 and December 31, 2024 is approximately $ 1,784,000 and $ 2,260,000 , respectively, held in escrow to fund future capital improvements.

In addition, included in prepaid expenses and other assets at June 30, 2025 is approximately $ 895,000 of mortgage insurance escrows.

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

Intangible assets are approximately $ 322,000 and $ 334,000 net of accumulated amortization of approximately $ 1,228,000 and $ 1,215,000 at March 31, 2025, and at December 31, 2024, respectively.

Financing fees in association with the line of credit of approximately $ 199,000 and $ 217,000 are net of accumulated amortization of approximately $ 26,000 and $ 8,000 at March 31, 2025 and December 31, 2024 respectively.

Intangible assets are approximately $ 5,128,000 and $ 334,000 net of accumulated amortization of approximately $ 1,441,000 and $ 1,215,000 at June 30, 2025, and at December 31, 2024, respectively.

Financing fees in association with the line of credit of approximately $ 180,000 and $ 217,000 are net of accumulated amortization of approximately $ 46,000 and $ 8,000 at June 30, 2025 and December 31, 2024 respectively.

MORTGAGE NOTES PAYABLE

At March 31, 2025 and December 31, 2024, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2.

At March 31, 2025, the interest rates on these loans ranged from 2.97 % to 4.95 %, payable in monthly installments aggregating approximately $ 1,566,000 including principal, to various dates through 2035.

At June 30, 2025 and December 31, 2024, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2.

At June 30, 2025, the interest rates on these loans ranged from 2.97 % to 5.99 %, payable in monthly installments aggregating approximately $ 2,101,000 including principal, to various dates through 2035.

The majority of the mortgages are subject to prepayment penalties.

At March 31, 2025, the weighted average interest rate on the above mortgages was 3.68 %.

At June 30, 2025, the weighted average interest rate on the above mortgages was 4.21 %.

The effective rate of 4.29 % includes the amortization expense of deferred financing costs.

1 unchanged sentence

The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

Financing fees of approximately $ 2,305,000 and $ 2,399,000 are net of accumulated amortization of approximately $ 1,827,000 and $ 1,733,000 at March 31, 2025 and December 31, 2024, respectively, which offset the total mortgage notes payable.

Financing fees of approximately $ 3,112,000 and $ 2,399,000 are net of accumulated amortization of approximately $ 1,869,000 and $ 1,733,000 at June 30, 2025 and December 31, 2024, respectively, which offset the total mortgage notes payable.

The Partnership has pledged tenant leases as additional collateral for certain of these loans.

Approximate annual maturities at March 31, 2025 are as follows:

On May 30, 2025, the Partnership borrowed $ 18,664,000 at a fixed interest rate of 5.84 %.

Proceeds were used to refinance the existing mortgage on Hamilton Highlands.

Also on May 30, 2025, the Partnership borrowed an additional $ 40,000,000 at a fixed rate of 5.99 %.

Proceeds were subsequently used for the purchase of Hill Estates.

Both advances were made from the existing Master Credit Facility as amended with KeyBank.

On June 18, 2025, the Partnership entered into an interim loan agreement with KeyBank for $ 67,500,000 at a floating interest rate of the SOFR rate plus 150 basis points.

The note is due on December 17, 2025.

Proceeds of the loan were used for the purchase of Hill Estates.

The loan is secured by a mortgage on the property and is limited guaranteed by the Partnership.

The Loan is prepayable, without prepayment penalty, upon not less than seven ( 7 ) days prior written notice to KeyBank as the Lender.

Approximate annual maturities at June 30, 2025 are as follows:

2026—current maturities

1 unchanged sentence

Line of Credit

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

On November 21, 2024, the Partnership entered into an agreement with Brookline Bank 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 %.

2 unchanged sentences

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.

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

As of June 30, 2025, 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.

4 unchanged sentences

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit.

At March 31, 2025, amounts received for prepaid rents of approximately $ 3,457,000 are included in cash and cash equivalents, and security deposits of approximately $ 3,543,000 are included in prepaid expenses and other assets and are restricted cash.

At June 30, 2025, amounts received for prepaid rents of approximately $ 4,363,000 are included in cash and cash equivalents, and security deposits of approximately $ 3,658,000 are included in prepaid expenses and other assets and are restricted cash.

PARTNERS’ CAPITAL

4 unchanged sentences

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

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

2 unchanged sentences

The following is information per Depositary Receipt:

Three Months Ended

Six Months Ended

Net Income per Depositary Receipt

1 unchanged sentence

TREASURY UNITS

Treasury Units at March 31, 2025 are as follows:

Treasury Units at June 30, 2025 are as follows:

General Partnership

3 unchanged sentences

On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025.

The Repurchase Program 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’s Second Amended and Restated Contract of Limited Partnership.

The Repurchase Program required 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’s Second Amended and Restated Contract of Limited Partnership.

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.

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;

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 of the plan, (iii) no Depositary Receipt shall be repurchased in excess of $ 95 per depositary receipt ( the “Repurchase Plan”).

1 unchanged sentence

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 March 31, 2025, the Partnership has repurchased 1,550,442 Depositary Receipts at an average price of $ 32.21 per receipt (or $ 966.32 per underlying Class A Unit), 4,538 Class B Units and 239 General Partnership Units, both at an average price of $ 1,289.00 per Unit, totaling approximately $ 56,100,000 including brokerage fees paid by the Partnership .

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

From August 20, 2007 through June 30, 2025, the Partnership has repurchased 1,553,365 Depositary Receipts at an average price of $ 32.30 per receipt (or $ 969 per underlying Class A Unit), 4,561 Class B Units and 240 General Partnership Units, both at an average price of $ 1,294 per Unit, totaling approximately $ 56,381,000 including brokerage fees paid by the Partnership .

During the six months ended June 30, 2025, the Partnership purchased a total of 3,007 Depositary Receipts.

The average price was $ 77.13 per receipt, or $ 2,313.90 per unit.

The cost including commission was approximately $ 6,900 .The Partnership was required to repurchase 0.67 Class B Units and 0.04 General Partnership units at a cost of $ 1,603 and $ 552 respectively.

The cost including commission was approximately $ 233,168 .

The Partnership was required to repurchase 23.8 Class B Units and 1.3 General Partnership units at a cost of $ 55,080 and $ 2,971 respectively.

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

RENTAL INCOME

During the three months ended March 31, 2025, approximately 94 % of rental income was related to residential apartments and condominium units with leases of one year or less.

During the six months ended June 30, 2025, approximately 94 % of rental income was related to residential apartments and condominium units with leases of one year or less.

The majority of these leases expire in June, July and August.

Approximately 6 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at March 31 2025 as follows:

Approximately 6 % was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30 2025 as follows:

Property Leases

The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with common area charges and real estate taxes.

Aggregate contingent rentals from continuing operations were approximately $ 184,000 and $ 211,000 for the three months ended March 31, 2025 and 2024 respectively.

Aggregate contingent rentals from continuing operations were approximately $ 466,000 and $ 398,000 for the six months ended June 30, 2025 and 2024 respectively.

Trader Joe’s and Blue Pearl, tenants at Staples Plaza and Walgreen’s, a tenant at 653 Worcester Road, Framingham, Massachusetts respectively, are approximately 34 % of the total commercial rental income.

4 unchanged sentences

annual base rent for

Through March 31,

Through June 30,

expiring leases

2 unchanged sentences

expiring leases

Rents receivable are net of an allowance for doubtful accounts of approximately $ 1,009,000 and $ 1,085,000 at March 31, 2025 and December 31, 2024.

Included in rents receivable at March 31, 2025 is approximately $ 11,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

Rents receivable are net of an allowance for doubtful accounts of approximately $ 958,000 and $ 1,085,000 at June 30, 2025 and December 31, 2024.

Included in rents receivable at June 30, 2025 is approximately $ 258,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

CASH FLOW INFORMATION

During the three months ended March 31, 2025 and 2024, cash paid for interest was approximately $ 3,696,000 , and $ 3,814,000 respectively.

Cash paid for state income taxes was approximately $ 82,000 and $ 53,000 during the three months ended March 31, 2025 and 2024, respectively.

During the six months ended June 30, 2025 and 2024, cash paid for interest was approximately $ 7,323,000 , and $ 7,649,000 respectively.

Cash paid for state income taxes was approximately $ 127,000 and $ 100,000 during the six months ended June 30, 2025 and 2024, respectively.

In 2025, the Partnership acquired construction in progress through accounts payable and accruals, which represented a non-cash investing activity of approximately $ 2,309,000 .

Interest capitalized amounted to approximately $ 149,000 for the three months ended March 31,2025.

Interest capitalized amounted to approximately $ 360,000 for the six months ended June 30, 2025.

The Partnership purchased the Hill Estates property partially through a mortgage payable which represents noncash Investing and Financing activities of $ 67,500,000 .

FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At March 31, 2025 and December 31, 2024, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

At June 30, 2025 and December 31, 2024, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At March 31, 2025 and December 31, 2024 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

The Partnership has investments in U.S.

Treasury bills, some of which mature over a period greater than 90 days and are classified as short-term investments.

At June 30, 2025 and December 31, 2024 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

The Partnership had investments in U.S.

Treasury bills, some of which matured over a period greater than 90 days and were classified as short-term investments.

Treasury bills were 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.

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Treasury bills classified within Level I of the fair value hierarchy.

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.

At March 31, 2025 and December 31, 2024 we estimated the fair value of our mortgage payable, derivative financial instrument, and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available.

We estimated the fair value of our secured mortgage debt that does not

have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3).

The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at March 31, 2025 and December 31, 2024, as compared with those in effect when the debt was issued or acquired.

At June 30, 2025 and December 31, 2024 we estimated the fair value of our mortgage payable, derivative financial instrument, and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available.

We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for

debt with similar terms and maturities (Level 3).

The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at June 30, 2025 and December 31, 2024, as compared with those in effect when the debt was issued or acquired.

The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

At March 31, 2025 and at December 31, 2024, the Partnership’s line of credit had an outstanding balance of zero .

At June 30, 2025 and at December 31, 2024, the Partnership’s line of credit had an outstanding balance of zero .

The following methods and assumptions were used by the Partnership in estimating the fair value of its financial instruments:

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The following table reflects the carrying amounts and estimated fair value of our debt.

March 31, 2025

June 30, 2025

Carrying Value

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* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2025 and December 31, 2024.

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 March 31, 2025 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 June 30, 2025 and December 31, 2024.

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 June 30, 2025 and current estimates of fair value may differ significantly from the amounts presented herein.

DERIVATIVE FINANCIAL INSTRUMENTS

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During the next 12 months, the Partnership estimates $ 57,000 will be reclassified as a decrease to interest expense .

As of March 31, 2025, the Partnership had one interest rate swap outstanding with a notional amount of approximately $ 279,000 designated as cash flow hedges of interest rate risk.

As of March 31, 2025, the Partnership did not have any interest rate derivatives in a net liability position.

The table below presents the fair value of the Partnership’s derivative financial instruments as well as their classification on the consolidated balance sheets as of March 31, 2025 and December 31, 2024.

As of June 30, 2025, the Partnership had one interest rate swap outstanding with a notional amount of approximately $ 215,000 designated as cash flow hedges of interest rate risk.

As of June 30, 2025, the Partnership did not have any interest rate derivatives in a net liability position.

The table below presents the fair value of the Partnership’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2025 and December 31, 2024.

Asset Derivatives designated

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Prepaid Expenses and Other Assets

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended March 31, 2025 and 2024.

Derivatives in Cash Flow Hedging Relationships

Amount of Gain

or (Loss) Recognized

in OCI on Derivative

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended June 30, 2025 and 2024.

Location of Gain

OCI Into Income

Amount of Gain

OCI into Income

Location of Gain

or (Loss) Recognized

Total Amount of

Location of Gain

Interest Expense

Amount of Gain

or (Loss) Recognized

presented in the

Derivatives in Cash Flow

or (Loss) Recognized

from Accumulated

consolidated statements

Hedging Relationships

in OCI on Derivative

OCI Into Income

OCI into Income

of operations

Quarter Ended March 31,

Three Months Ended June 30,

Interest rate swaps

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( 3,899,695 )

Six Months Ended June 30,

Interest rate swaps

Interest expense

Interest and other investment income (loss)

( 7,927,588 )

( 7,806,711 )

TAXABLE INCOME AND TAX BASIS

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In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable.

As of March 31, 2025, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2021 forward.

As of June 30, 2025, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2021 forward.

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property.

The Partnership has between a 40 %- 50 % ownership interests in each investment.

Partnership has between a 40 %- 50 % ownership interests in each investment.

The other investors are the Brown Family related entities and five current and former employees of the Management Company.

The Brown Family’s ownership

interest was between 47.6 % and 59 % , with the balance owned by the others.

The Brown Family’s ownership interest was between 47.6 % and 59 % , with the balance owned by the others.

A description of each investment is as follows:

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

At March 31, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 125,000,000 .

At June 30, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 125,000,000 .

This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

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Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed.

At March 31, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 10,000,000 .

At June 30, 2025, the balance on this mortgage before unamortized deferred financing costs is $ 10,000,000 .

The investment in the parking lot is referred to as Hamilton Essex Development, LLC;

the investment in the apartments is referred to as Hamilton Essex 81, LLC.

The Partnership is currently in the process of refinancing the Hamilton Essex 81, LLC mortgage.

See Note 19, SUBSEQUENT EVENTS.

On March 2, 2005, the Partnership invested $ 2,352,000 for a 50 % ownership interest in a 176 -unit apartment complex with an additional small commercial building located in Quincy, Massachusetts.

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The purchase price was $ 10,100,000 .

On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $ 6,000,000 , at 3.71 %, interest only.

On September 12,

2016, the property was refinanced with a 15 year mortgage in the amount of $ 6,000,000 , at 3.71 %, interest only.

The Joint Venture Partnership paid off the prior mortgage of approximately $ 5,158,000 with the proceeds of the new mortgage and made a distribution of $ 385,000 to the Partnership.

The cost associated with the refinancing was

approximately $ 123,000 .

The cost associated with the refinancing was approximately $ 123,000 .

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.

At March 31 2025, the balance on this mortgage before unamortized deferred financing costs is $ 6,000,000 .

At June 30 2025, the balance on this mortgage before unamortized deferred financing costs is $ 6,000,000 .

This investment is referred to as Hamilton Minuteman, LLC.

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At March 31, 2025, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

At June 30, 2025, the balance of the mortgage before unamortized deferred finance is $ 23,589,000 .

The investment is referred to as Hamilton on Main LLC.

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Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed.

At March 31, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $ 8,181,000 .

At June 30, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $ 8,119,000 .

This investment is referred to as 345 Franklin, LLC.

Summary financial information at March 31, 2025

Summary financial information at June 30, 2025

Rental Properties

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Total units/condominiums

Financial information for the three months ended March 31, 2025

Financial information for the six months ended June 30, 2025

Rental Income

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Net Income —NERA 40 %

Future annual mortgage maturities at March 31, 2025 are as follows:

Financial information for the three months ended June 30, 2025

Rental Income

Laundry and Sundry Income

Administrative

Depreciation and Amortization

Management Fees

Repairs and Maintenance

Taxes and Insurance

Income Before Other Income

Other Income (Loss)

Interest Expense

( 1,273,633 )

( 1,920,230 )

Interest Income

( 1,230,296 )

( 1,858,464 )

Net Income (Loss)

Net Income (Loss)—NERA 50 %

Net Income —NERA 40 %

Future annual mortgage maturities at June 30, 2025 are as follows:

unamortized deferred financing costs

At March 31, 2025, the weighted average interest rate on the above mortgages was 4.32 %.

At June 30, 2025, the weighted average interest rate on the above mortgages was 4.32 %.

The effective rate was 4.39 % including the amortization expense of deferred financing costs.

Summary financial information at March 31, 2024

Summary financial information at June 30, 2024

Rental Properties

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Total units/condominiums

Financial information for the three months ended March 31, 2024

Financial information for the six months ended June 30, 2024

Rental Income

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Interest Income

Other income (Expense)

( 2,521,159 )

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Net Income —NERA 40 %

Financial information for the three months ended June 30, 2024

Rental Income

Laundry and Sundry Income

Administrative

Depreciation and Amortization

Management Fees

Repairs and Maintenance

Taxes and Insurance

Income Before Other Income

Other Income (Loss)

Interest Expense

( 1,269,641 )

( 1,802,252 )

Interest Income

( 1,245,025 )

( 1,750,921 )

Net Income (Loss)

Net Income (Loss)—NERA 50 %

Net Income —NERA 40 %

EMPLOYEE BENEFIT 401(k) PLANS

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Participants are always 100 percent vested in their pre-tax contributions and will begin vesting in any matching or profit-sharing contributions made on their behalf after two years of service with the Partnership at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Partnership.

Total expense recognized by the Partnership for the 401(k) Plan for the three months ended March 31, 2025 was $ 16,000 .

Total expense recognized by the Partnership for the 401(k) Plan for the six months ended June 30, 2025 was $ 32,000 .

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

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SUBSEQUENT EVENTS

On April 15, 2025, New England Realty Associates Limited Partnership (the “Partnership”) entered into a Purchase and Sale Agreement to cause its wholly-owned subsidiaries to purchase a multifamily and commercial real property located at 49-51-53-55 Hill Road, 10-12-22-24 Vale Road and 7-45 Hill Road, 10-16 Pond Street, 18-24 Pond Street, 26-32 Pond Street, 34-40 Pond Street, 66-72 Pond Street, 74-80 Pond Street, 6-8 Pond Street, 13-19 Pond Street, 14-20 Hill Road, 22-28 Hill Road, 30-36 Hill Road, 38-44 Hill Road, 46-52 Hill Road, 42-48 Pond Street, 45-51 Pond Street, 50-56 Pond Street, 53-59 Pond Street, 58-64 Pond Street, 21-27 Pond Street, 29-35 Pond Street, and 37-43 Pond Street (the “Hill Estates Properties”), together with commercial properties located at 1 Vale Road (aka 4 Vale Road), 4 Hill Road and 55 Brighton Street.

In addition, the Company is also buying two non-contiguous commercial properties located at 26 Brighton Avenue, and 90 Concord Avenue, Belmont, Middlesex County, Massachusetts (the “Off Campus Properties”) from Oak Realty and Service Company, LLC, Vale Realty and Service Company, LLC and Digiovanni Bros., Inc.

The property consists of 396 residential condominium units within twenty-eight ( 28 ) buildings known as Hill Estates, a two -story maintenance and administrative building, a two -story office building with basement, a two -story mixed use building with two ground floor retail units and five residential apartment units, a 10,500 square foot office building, and an approximately 13,350 square foot office building, along with all buildings, structures, fixtures, roads, driveways, approximately 589 parking spaces, and other improvements on the property.

The total purchase price for the property under the purchase agreement is $ 175,000,000 with an allocated purchase price of $ 172,000,000 for the Hill Estates Properties and three commercial buildings, and $ 3,000,000 for the Off Campus Properties.

The Partnership provided a $ 5,000,000 deposit at signing of the Purchase Agreement, refundable upon termination of the Purchase Agreement due to uncured title objections, a Major Casualty (in excess of $ 500,000 ), or any Seller default.

The purchase and sale of the property was subject to a title due diligence period for the Partnership which expired on May 6, 2025.

In addition, the Partnership may perform any other inspections it deems necessary up until the closing date.

The Partnership expects closing of the purchase on June 18, 2025, subject to the satisfaction of closing conditions.

The Partnership has the right to extend the 30-day closing date by an additional 30 days , upon notice and payment of an additional $ 3,000,000 deposit.

The Partnership plans to finance the purchase with cash, the proceeds of treasury bills, and debt.

On May 2, the Partnership signed a Rate Lock Authorization Agreement with Key Bank in connection with the refinancing and addition to the master credit facility of Hamiton Highlands for $ 18,759,000 and a borrow up on the master credit facility of $ 40,000,000 .

The borrow up will require additional pledges on all existing properties covered by the master credit facility.

The closing of the refinancing and the borrow up is anticipated to be May 8, 2025.

At signing of the Rate Lock Authorization Agreement, the Partnership deposited $ 1,175,180 as a good faith deposit.

On May 8, 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on May 30, 2025.

From April 1, 2025 through May 6, 2025, the Partnership has purchased 1,443 Depository Receipts .

On August 7, 2025, the Partnership approved a quarterly distribution of $ 12.00 per Unit ($ 0.40 per Receipt), payable on September 30, 2025.

From July 1, 2025 through August 8, 2025, the Partnership has purchased 533 Depository Receipts .

On July 14, 2025, the Partnership entered into a loan commitment with KeyBank for the refinancing of the existing 81 Essex Street loan that matures on October 1, 2025.

The loan commitment is for up to $ 12,104,000 at a fixed interest rate to be determined at Rate Lock and for an interest only term of ten years .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements