UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended ~~September~~June 30, ~~2017~~2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from to

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)


Massachusetts		04-2619298
(State or other jurisdiction of		(I.R.S. employer
incorporation or organization)		identification no.)

39 Brighton Avenue, Allston, Massachusetts		02134
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: ~~(617)~~ (617) 783-0039

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		Accelerated ~~filer~~ Filer ☒

Non-accelerated filer ☐		Smaller reporting company ☐☒
(Do not check if a smaller reporting company)		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Class A	NEN	NYSE MKT Exchange

As of ~~November 3, 2017,~~August 6, 2020, there were ~~99,509~~97,405 of the registrant’s Class A units ~~(2,985,282~~(2,922,151 Depositary Receipts) of limited partnership issued and outstanding and ~~23,633~~23,134 Class B units issued and outstanding.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

~~INDEX~~


PART I—FINANCIAL INFORMATION
~~PART I—FINANCIAL INFORMATION~~Item 1.	Financial Statements (Unaudited)	3
~~Item 1.~~	~~Financial Statements (Unaudited)~~	3
	Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019	4
	Consolidated Statements of Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019	5
	Consolidated Statements of Changes in Partners’ Capital for the ~~Nine~~Six Months ~~ended September~~Ended June 30, ~~2017~~2020 and ~~2016~~2019	6
	Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26 28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
~~Item 4.~~	~~Controls and Procedures~~	39
~~PART II—OTHER INFORMATION~~42
Item 1.4.	~~Legal Proceedings~~Controls and Procedures	40 42
~~Item 1A.~~			~~Risk Factors~~PART II—OTHER INFORMATION	40
Item 2.1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40 45
Item 3.	Defaults Upon Senior Securities	40 46
Item 4.	Mine Safety Disclosure	40 46
Item 5.	Other Information	41 46
Item 6.	Exhibits	41 46
SIGNATURES		43 48

Table of Contents

NEW ENGLAND REALTY ASSOCIATES, L.P.

PART 1 -- FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of income, changes in partners’ capital, and cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair presentation for the interim periods.

The consolidated balance sheet as of December 31, ~~2016~~2019 has been derived from the audited consolidated balance sheet at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

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, ~~2016.~~2019.

The results of operations for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2017~~2020 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 30,		December 31,
	2020		2019
ASSETS		(Unaudited)
Rental Properties	$	271,417,401	$	278,363,988
Cash and Cash Equivalents		15,396,023		7,546,324
Rents Receivable		1,014,905		484,610
Real Estate Tax Escrows		437,502		446,781
Prepaid Expenses and Other Assets		5,116,550		6,021,544
Investments in Unconsolidated Joint Ventures		1,453,894		1,430,402
Total Assets	$	294,836,275	$	294,293,649
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable		284,402,031		281,771,246
Notes Payable		17,000,000		18,000,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		20,129,903		19,970,089
Accounts Payable and Accrued Expenses		3,597,414		4,274,266
Advance Rental Payments and Security Deposits		7,428,945		8,101,835
Total Liabilities		332,558,293		332,117,436
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 121,756 and 121,978 units outstanding in 2020 and 2019 respectively		(37,722,018)		(37,823,787)
Total Liabilities and Partners’ Capital	$	294,836,275	$	294,293,649

September 30,

December 31,


2017

2016

ASSETS

  (Unaudited)

Rental Properties

$
209,149,689

$
169,462,811

Cash and Cash Equivalents

14,913,412

7,463,697

Rents Receivable

559,048

567,627

Insurance Recovery Receivable

46,889

700,932

Real Estate Tax Escrows

481,982

444,625

Prepaid Expenses and Other Assets

4,180,236

3,585,870

Investments in Unconsolidated Joint Ventures

8,452,484

8,336,505

Total Assets

$
237,783,740

$
190,562,067

LIABILITIES AND PARTNERS’ CAPITAL

Mortgage Notes Payable

233,615,499

212,709,080

Notes Payable

25,000,000

—

Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture

2,737,854

2,577,606

Accounts Payable and Accrued Expenses

3,157,249

4,052,095

Advance Rental Payments and Security Deposits

5,649,396

5,448,011

Total Liabilities

270,159,998

224,786,792

Commitments and Contingent Liabilities (Notes 3 and 9)

—

—

Partners’ Capital 124,386 and 124,409 units outstanding in 2017 and 2016 respectively

(32,376,258)

(34,224,725)

Total Liabilities and Partners’ Capital

$
237,783,740

$
190,562,067

See notes to consolidated financial statements.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenues
Rental income	$	15,646,814	$	14,886,423	$	31,900,244	$	29,654,899
Laundry and sundry income		112,292		104,980		234,446		218,649
		15,759,106		14,991,403		32,134,690		29,873,548
Expenses
Administrative		512,195		626,180		1,096,853		1,238,938
Depreciation and amortization		4,601,617		3,590,240		9,167,084		7,272,918
Management fee		615,541		597,197		1,264,534		1,187,806
Operating		1,291,781		1,125,813		2,960,183		3,009,831
Renting		128,608		242,515		325,479		424,573
Repairs and maintenance		2,049,174		2,287,313		4,135,392		4,231,544
Taxes and insurance		2,115,721		1,942,998		4,396,262		3,977,104
		11,314,637		10,412,256		23,345,787		21,342,714
Income Before Other Income (Expense)		4,444,469		4,579,147		8,788,903		8,530,834
Other Income (Expense)
Interest income		52		90		159		269
Interest expense		(3,423,583)		(3,133,439)		(6,873,908)		(6,133,728)
Income from investments in unconsolidated joint ventures		444,113		513,406		918,680		1,062,345
Other expense		—		(194,960)		—		(194,960)
		(2,979,418)		(2,814,903)		(5,955,069)		(5,266,074)
Net Income	$	1,465,051	$	1,764,244	$	2,833,834	$	3,264,760

Net Income per Unit	$	12.03	$	14.40	$	23.26	$	26.61

Weighted Average Number of Units Outstanding		121,756		122,483		121,816		122,710

~~(Unaudited)~~

Three Months Ended

Nine Months Ended

September 30,

September 30,


2017

2016

2017

2016

Revenues

Rental income

$
13,321,770

$
12,273,589

$
38,636,732

$
36,482,801

Laundry and sundry income

100,035

98,292

316,471

326,633

13,421,805

12,371,881

38,953,203

36,809,434

Expenses

Administrative

525,125

524,293

1,513,869

1,477,708

Depreciation and amortization

3,664,997

3,079,368

9,647,751

9,167,516

Management fee

544,399

511,730

1,599,647

1,513,226

Operating

1,051,910

995,787

3,797,935

3,489,724

Renting

301,423

301,696

482,157

544,923

Repairs and maintenance

2,678,780

2,364,364

6,187,673

6,185,250

Taxes and insurance

1,727,218

1,496,807

5,083,674

4,684,062

10,493,852

9,274,045

28,312,706

27,062,409

Income Before Other Income (Expense)

2,927,953

3,097,836

10,640,497

9,747,025

Other Income (Expense)

Interest income

416

305

1,132

710

Interest expense

(3,046,818)

(2,553,771)

(8,113,197)

(7,650,096)

Income  from investments in unconsolidated joint ventures

990,169

562,584

2,721,231

1,220,666

Gain on the sale of real estate

—

103,793

—

103,793

(2,056,233)

(1,887,089)

(5,390,834)

(6,324,927)

Net Income

$
871,720

$
1,210,747

$
5,249,663

$
3,422,098

Net Income per Unit

$
7.01

$
9.69

$
42.20

$
27.38

Weighted Average Number of Units Outstanding

124,387

124,923

124,394

124,995

See notes to consolidated financial statements.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN ~~PARTNERS’~~PARTNER’S CAPITAL

(Unaudited)


	Units						Partners’ Capital
	Limited		General		Treasury		Limited				General
	Class A	Class B	Partnership	Subtotal	Units	Total	Class A		Class B		Partnership		Total
Balance January 1, 2019	144,180	34,243	1,802	180,225	55,839	124,386	$	(28,527,352)	$	(6,741,825)	$	(354,833)	$	(35,624,010)
Distribution to Partners	—	—	—	—	—	—		(1,881,955)		(446,964)		(23,524)		(2,352,443)
Stock Buyback	—	—	—	—	1,995	(1,995)		(2,644,552)		(628,044)		(33,055)		(3,305,651)
Net Income	—	—	—	—	—	—		2,611,808		620,304		32,648		3,264,760
Balance June 30, 2019	144,180	34,243	1,802	180,225	57,834	122,391	$	(30,442,051)	$	(7,196,529)	$	(378,764)	$	(38,017,344)

Balance January 1 , 2020	144,180	34,243	1,802	180,225	58,247	121,978	$	(30,287,245)	$	(7,159,715)	$	(376,827)	$	(37,823,787)
Distribution to Partners	—	—	—	—	—	—		(1,870,428)		(444,226)		(23,380)		(2,338,034)
Stock Buyback	—	—	—	—	222	(222)		(315,220)		(74,870)		(3,941)		(394,031)
Net Income	—	—	—	—	—	—		2,267,068		538,428		28,338		2,833,834
Balance June 30, 2020	144,180	34,243	1,802	180,225	58,469	121,756	$	(30,205,825)	$	(7,140,383)	$	(375,810)	$	(37,722,018)

~~(Unaudited)~~

Units

Partners’s Capital

Limited

General

Treasury

Limited

General


Class A

Class B

Partnership

Subtotal

Units

Total

Class A

Class B

Partnership

Total

Balance January 1, 2016

144,180

34,243

1,802

180,225

54,851

125,374

$
(24,673,535)

$
(5,830,548)

$
(306,870)

$
(30,810,953)

Distribution to Partners

—

—

—

—

—

—

(2,248,621)

(534,047)

(28,108)

(2,810,776)

Stock Buyback

—

—

—

—

451

(451)

(558,723)

(128,874)

(6,783)

(694,380)

Net Income

—

—

—

—

—

—

2,737,678

650,199

34,221

3,422,098

Balance September 30, 2016

144,180

34,243

1,802

180,225

55,302

124,923

$
(24,743,201)

(5,843,270)

(307,540)

(30,894,011)

Balance January 1 , 2017

144,180

34,243

1,802

180,225

55,816

124,409

$
(27,407,924)

$
(6,475,961)

$
(340,840)

$
(34,224,725)

Distribution to Partners

—

—

—

—

—

—

(2,686,919)

(638,143)

(33,586)

(3,358,648)

Stock Buyback

—

—

—

—

23

(23)

(34,038)

(8,084)

(426)

(42,548)

Net Income

—

—

—

—

—

4,199,730

997,436

52,497

5,249,663

Balance September 30, 2017

144,180

34,243

1,802

180,225

55,839

124,386

$
(25,929,151)

$
(6,124,752)

$
(322,355)

$
(32,376,258)

See notes to consolidated financial statements.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2020		2019
Cash Flows from Operating Activities
Net income	$	2,833,834	$	3,264,759
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		9,167,084		7,272,918
Amortization of deferred financing costs		119,835		225,494
(Income) from investments in joint ventures		(918,680)		(1,062,345)
Allowance for doubtful accounts		729,653		323,728
Change in operating assets and liabilities
Proceeds from unconsolidated joint ventures		5,000		770,000
(Increase) in rents receivable		(1,259,948)		(166,880)
(Decrease) Increase in accounts payable and accrued expense		(676,850)		474,466
Decrease in real estate tax escrow		9,279		49,347
Decrease (Increase) in prepaid expenses and other assets		188,556		(62,380)
( Decrease) Increase in advance rental payments and security deposits		(672,890)		822,139
Total Adjustments		6,691,039		8,646,487
Net cash provided by operating activities		9,524,873		11,911,246
Cash Flows From Investing Activities
Distribution in excess of investment in unconsolidated joint ventures		1,060,585		1,597,152
(Investment) in unconsolidated joint ventures		(10,585)		(19,152)
Improvement of rental properties		(1,504,059)		(1,715,987)
Net cash provided by (used in) investing activities		(454,059)		(137,987)
Cash Flows from Financing Activities
Payment of financing costs		(136,325)		(235,147)
Proceeds of mortgage notes payable		3,781,877		679,000
Payment of note payable		(1,000,000)		(2,000,000)
Principal payments of mortgage notes payable		(1,134,602)		(1,028,035)
Stock buyback		(394,031)		(3,305,651)
Distributions to partners		(2,338,034)		(2,352,443)
Net cash (used in) financing activities		(1,221,115)		(8,242,276)
Net Increase in Cash and Cash Equivalents		7,849,699		3,530,983
Cash and Cash Equivalents, at beginning of period		7,546,324		9,059,901
Cash and Cash Equivalents, at end of period	$	15,396,023	$	12,590,884

~~(Unaudited)~~

Nine Months Ended September 30,


2017

2016

Cash Flows from Operating Activities

Net income

$
5,249,663

$
3,422,098

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

Depreciation and amortization

9,647,751

9,167,516

Amortization of deferred financing costs

141,404

141,122

(Income)  from investments in joint ventures

(2,721,231)

(1,220,666)

Gain on sale of real estate

—

(103,793)

Change in operating assets and liabilities

Decrease (Increase)   in rents receivable

8,579

(202,024)

(Decrease) in accounts payable and accrued expense

(552,022)

(1,760,588)

Decrease in insurance recovery receivable

311,218

190,781

(Increase)  in real estate tax escrow

(37,357)

(47,365)

(Increase) Decrease in prepaid expenses and other assets

(221,852)

498,350

Increase in advance rental payments and security deposits

201,385

77,127

Total Adjustments

6,777,875

6,740,460

Net cash provided by operating activities

12,027,538

10,162,558

Cash Flows From Investing Activities

Proceeds from unconsolidated joint ventures

4,901,250

2,346,829

Distribution in excess of investment in unconsolidated joint ventures

468,420

360,000

(Investment)  in unconsolidated joint ventures

(2,604,170)

(2,443,829)

Improvement of rental properties

(4,135,472)

(3,564,402)

Purchase of rental property

(45,571,670)

—

Net proceeds from the sale of real estate

—

772,336

Net cash (used in) investing activities

(46,941,642)

(2,529,066)

Cash Flows from Financing Activities

Payment of financing costs

(176,250)

(174,718)

Proceeds of mortgage notes payable

22,250,000

20,071,000

Proceeds of note payable

41,000,000

—

Payment of note payable

(16,000,000)

(25,000,000)

Principal payments of mortgage notes payable

(1,308,735)

(1,449,221)

Stock buyback

(42,548)

(694,380)

Distributions to partners

(3,358,648)

(2,810,776)

Net cash provided by (used in) financing activities

42,363,819

(10,058,095)

Net Increase  (Decrease) in Cash and Cash Equivalents

7,449,715

(2,424,603)

Cash and Cash Equivalents, at beginning of period

7,463,697

10,298,186

Cash and Cash Equivalents, at end of period

$
14,913,412

$
7,873,583

See notes to consolidated financial statements.

Table of Contents

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September~~June 30, ~~2017~~2020

(Unaudited)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business: New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 2629 properties which include 1821 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at ~~one~~1 condominium complex. These properties total ~~2,632~~2,892 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a ~~40- 50%~~40 - 50% interest in 97 residential and mixed use properties consisting of ~~739~~688 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

Principles of Consolidation: The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the ~~nine~~7 limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership”. Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investment in Unconsolidated Joint ~~Ventures).~~Ventures.)

The Partnership accounts for its investments in joint ventures using the equity method of accounting. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to ~~zero~~0 and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. In 2013 and beyond, the carrying values of some investments fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 14: Investment in Unconsolidated Joint Ventures.)

The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIE (the “primary beneficiary”). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that equity’s activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the

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variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

Impairment: On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership’s intent and ability to hold 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. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

Revenue Recognition: Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. ~~Contingent rent for~~Revenue from commercial ~~properties are~~leases also include reimbursements and recoveries received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market ~~leases.~~ leases. The capitalized above-market lease ~~values~~amounts are accounted for ~~acquired properties are amortized~~ as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”).

Under this standard, 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. 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. We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred.

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beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

Rental Properties:Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions which improve or extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

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. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market

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conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset’s carrying value to determine if a write-down to fair value is required.

Leasing Fees:Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Deferred Financing ~~Costs:~~Costs: Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. 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 ~~$141,000~~$120,000 and ~~$141,000~~$225,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively.

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 13).

Cash Equivalents: The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting: Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as ~~one~~1 segment.

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Comprehensive Income: Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in ~~2017~~2020 or ~~2016~~2019 other than net income as reported.

Income (Loss) Per Depositary Receipt: 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. All references to Depositary Receipts in the report are reflective of the 3- for-1 forward split.

Income Per Unit: Net income per unit has been calculated based upon the weighted average number of units outstanding during each period presented. The Partnership has no dilutive units and, therefore, basic net income is the same as diluted net income per unit (see Note 7: Partner’s Capital).

Concentration of Credit Risks and Financial Instruments: The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in ~~2017~~2020 or ~~2016.~~2019. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At ~~September~~June 30, ~~2017,~~2020, 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 ~~0.35%~~0.03%. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively approximately ~~$16,251,000,~~$15,636,000, and ~~$8,911,000~~$7,407,000 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 ~~$153,287~~$145,803 and ~~$154,105~~$141,975 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively.

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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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 there was no capitalized interest.

Extinguishment of Debt: When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different, then they are recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same, then they are recorded as an exchange of debt. All refinancing qualify as extinguishment of debt.

Reclassifications: Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

NOTE 2. RENTAL PROPERTIES

As of ~~September~~June 30, ~~2017,~~2020, the Partnership and its Subsidiary Partnerships owned ~~2,632~~2,892 residential apartment units in 2225 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 ~~September~~June 30, ~~2017,~~2020, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in ~~nine~~7 residential and mixed use complexes (the “Investment Properties”) at ~~September~~June 30, ~~2017~~2020 with a total of ~~739~~688 apartment units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

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Rental properties consist of the following:


	September 30, 2017		December 31, 2016		Useful Life

									June 30, 2020		December 31, 2019		Useful Life
Land, improvements and parking lots	$	64,694,380	$	52,612,929	15	-	40	years	$	86,864,868	$	86,693,759	15	-	40	years
Buildings and improvements		202,705,581		173,536,288	15	-	40	years		253,113,482		252,896,183	15	-	40	years
Kitchen cabinets		12,585,369		8,738,323	5	-	10	years		17,633,302		17,376,841	5	-	10	years
Carpets		9,181,606		7,621,292	5	-	10	years		11,317,057		10,976,972	5	-	10	years
Air conditioning		690,535		690,535	5	-	10	years		573,389		573,389	5	-	10	years
Laundry equipment		274,389		269,784	5	-	7	years		709,210		709,210	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years		1,885,265		1,885,265	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years		1,092,194		1,092,194	10	-	30	years
Equipment		10,816,225		10,029,639	5	-	30	years		17,574,649		17,391,731	5	-	30	years
Motor vehicles		237,954		237,954			5	years		211,660		178,847			5	years
Fences		37,465		37,465	5	-	15	years		46,872		38,482	5	-	15	years
Furniture and fixtures		9,316,804		8,127,100	5	-	7	years		8,520,979		8,235,292	5	-	7	years
Smoke alarms		659,859		174,059	5	-	7	years		505,835		505,835	5	-	7	years
Total fixed assets		312,784,092		263,659,293						400,048,762		398,554,000
Less: Accumulated depreciation		(103,634,403)		(94,196,482)						(128,631,361)		(120,190,012)
	$	209,149,689	$	169,462,811
									$	271,417,401	$	278,363,988

On ~~July 6, 2017, Woodland Park Partners,~~December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, a ~~newly formed~~wholly-owned subsidiary of ~~the~~New England Realty Associates Limited Partnership ~~purchased the Woodland Park~~closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a ~~126-unit~~181 unit apartment complex located at ~~264-290 Grove~~57 Mill Street, ~~Newton,~~Woburn, Massachusetts ~~(the “Property”),~~ for aan aggregate purchase price of ~~$45,600,000.~~$59,550,000 in cash. Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan from Insurance Strategy Funding Corp. LLC described below. The closing costs were approximately ~~$64,000.~~

To fund the purchase price, the Partnership borrowed $25,000,000 under its outstanding line of credit with KeyBank, NA, and $16,000,000 from HBC Holdings, LLC, a Massachusetts limited liability company controlled by Harold Brown. The loan from HBC Holdings will mature on July 16, 2018, with interest only at 4.75%. The balance of the purchase price was funded by the Partnership’s cash reserves.$237,000. From the purchase price, the Partnership allocated

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approximately ~~$541,000~~$1,282,000 for in- place leases, and approximately ~~$42,000~~$136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 2436 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of the initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain financial conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of 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 ~~$1,600,000~~$1,265,000 and ~~$1,513,000~~$1,188,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, approximately ~~$609,000~~$533,000 and ~~$772,000,~~$593,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the ~~2017~~2020 expenses referred to above, approximately ~~$199,000~~$102,000 consisted of repairs and maintenance, ~~$272,000~~and $126,000 of administrative ~~expense and $1,000 for commercial brokerage fees.~~expense. Approximately ~~$137,000~~$305,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in ~~2017,~~2020, the Hamilton Company received approximately ~~$1,125,000~~$578,000 from the Investment Properties of which approximately ~~$510,000~~$321,000 was the management fee, approximately ~~$34,000~~$12,000 was for maintenance services, approximately ~~$27,000~~$10,000 was for administrative services and

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approximately ~~$554,000~~$235,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts of rental income on the majority of investment properties 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 ~~$2,508,000~~$1,738,000 and ~~$2,212,000~~$1,668,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, 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. ~~There were no employer contributions during 2017 and 2016.~~For the six months ended June 30, 2020, the Partnership accrued $22,000 for the employer’s match portion to the plan. For the six months ended June 30, 2019, the Partnership contributed $18,000 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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the Management Company charged the Partnership ~~$93,750~~$62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the nine months ended September 30, 2017 and 2016 this individual received fees of $56,250.

The Partnership has invested in ~~nine~~7 limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are the Estate of Harold Brown, ~~the President of the Management Company~~ and ~~five other~~5 current and previous employees of the Management Company. ~~Harold Brown’s~~The Brown Family related entities’ ownership interest iswas between ~~43.2%~~47.6% and ~~56%~~59%. See Note 14 for a description of the properties and their operations.

NOTE 4. PREPAID EXPENSES and OTHER ASSETS

Approximately ~~$2,379,000,~~$2,906,000, and ~~$2,381,000~~$2,936,000 of security deposits are included in prepaid expenses and other assets at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively. The security deposits and escrow accounts are restricted cash.

~~Included~~Also, included in prepaid expenses and other assets at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 is approximately ~~$326,000~~$769,000 and ~~$423,000,~~$501,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisitions of ~~both Woodland Park~~Mill Street Apartments and ~~the Residence at Captain Parkers~~Webster Green Apartments are included in prepaid expenses and other assets. ~~Intangible~~Intanbible assets are approximately ~~$442,000~~$715,000 net of accumulated amortization of approximately ~~$644,000~~$845,000 and approximately ~~$12,000~~$1,382,000 net of accumulated amortization of approximately ~~$492,000~~$178,000 at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

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Financing fees in association with the line of credit of approximately $0$15,000 and ~~$28,000~~$36,000 are net of accumulated amortization of approximately ~~$141,000~~$114,000 and ~~$113,000~~$93,000 at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At ~~September~~June 30, ~~2017,~~2020, the interest rates on these loans ranged from ~~3.24%~~3.53% to ~~5.97%~~5.66%, payable in monthly installments aggregating approximately ~~$1,060,000~~$1,257,000 including principal, to various dates through ~~2029.~~2035. The majority of the mortgages are subject to prepayment penalties. At ~~September~~June 30, ~~2017,~~2020, the weighted average interest rate on the above mortgages was ~~4.59%~~4.42%. The effective rate of ~~4.67%~~4.51% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. 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 ~~$1,461,000~~$1,465,000 and ~~$1,454,000~~$1,449,000 are net of accumulated amortization of approximately ~~$1,226,000~~$1,444,000 and ~~$1,061,000~~$1,411,000 at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016, respectively.~~2019, respectively offset the total mortgage notes payable.

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

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Approximate annual maturities at ~~September~~June 30, ~~2017~~2020 are as follows:

2018—current maturities

$
1,823,000

2019

7,903,000

2020

4,324,000

2021

2,312,000

2022

2,561,000

Thereafter

216,153,000

235,076,000

Less: unamortized deferred financing costs

(1,461,000)

$
233,615,000


2021—current maturities	$	2,357,000
2022		2,542,000
2023		79,930,000
2024		25,419,000
2025		11,027,000
Thereafter		164,592,000
		285,867,000
Less: unamortized deferred financing costs		(1,465,000)
	$	284,402,000

On ~~September 29, 2017, Woodland Park Partners~~March 31, 2020, Nera Brookside Associates, LLC ~~( “Woodland Park”~~(“Brookside Apartments”), entered into a ~~Multifamily Loan~~Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on April 1, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement ~~(the “Loan Agreement”)~~dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with ~~KeyBank National Association (the “Lender”). The manager~~the remaining portion of ~~Woodland Park is NewReal, Inc. (“New Real”),~~ the ~~general partner~~proceeds added to cash reserves. In connection with this refinancing, there were closing costs of approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership ~~(the “Partnership”)~~closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price, the Partnership isallocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the ~~sole member~~value of ~~Woodland Park. The~~tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement ~~provides~~with Insurance Strategy Funding Corp. LLC providing for a loan in the maximum principal amount of $35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term ~~loan (the “Loan”~~of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

On May 31, 2019, Residences at Captain Parker, LLC (“Captain Parker”), entered into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of ~~$22,250,000. The Loan~~$20,750,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 4.05% per annum, and the principal amount of the Note is due and payable on ~~October~~June 1, ~~2027 (the “Due Date”), unless~~2029. The Note is secured by a mortgage on the ~~due date~~Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane, Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2019. The Note is ~~accelerated in accordance with~~guaranteed by the ~~Loan’s terms, with interest only through October 1, 2022. Borrowings under~~Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker used the ~~Loan will bear interest at the rate of 3.79%. The~~ proceeds of the loan ~~was used~~ to pay off an outstanding loan of approximately $20,071,000. In connection with this refinancing, the ~~loan from HBC Holdings, LLC and pay down the line~~property incurred a prepayment penalty of ~~credit.~~

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). The manager of Captain Parker is NewReal, Inc. (“New Real”), the general partner of New England Realty Associates Limited Partnership (the “Partnership”). The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”)approximately $202,000. This expense was included in the principal amount of $20,071,000. The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms. Borrowings under the Loan will bear interest at rates equal to (i) the one month LIBOR rate for United States Dollar Deposits, determined monthly, plus 201 basis points. The interest rate increases upon an event of default.

~~Captain Parker is required to repay the aggregate principal amount of the Loan by the Due Date. Interest payments~~other expense on the Loans are payable monthly in arrears on specified dates set forth in the Loan Agreement. Principal payments on the Loan are also payable monthly commencing on March 1, 2022. The note issued by Captain Parker in connection with the Loan Agreement (the “Note”) also contains provisions for optional prepayment with a penalty under certain circumstances.consolidated statement of income.

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Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The ~~original~~ 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 costs associated with the line of credit were approximately $125,000. As of September 30, 2017, the credit line had an outstanding balance of $25,000,000, which was used on July 6, 2017, in conjunction with a loan of $16,000,000 from HBC Holdings, LLC, a Massachusetts Limited Liability company controlled by Harold Brown, and cash reserves, to purchase Woodland Park Partners, LLC (“Woodland Park”).The loan from HBC was paid off on September 29, 2017 from the proceeds of the loan from Keybank. The total interest paid for the HBC loan was approximately $182,000. The Line of Credit was paid down by $8,000,000 on October 5, 2017. The agreement originally expired on July 31, 2017, and ~~has been subsequently~~was

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extended until October 31, 2020. Management is currently working with the lender on a three year extension for the credit line. The costs associated with the line of credit extension were approximately $128,000.

On ~~September 15, 2015,~~December 19, 2019, the Partnership drew down on the line of credit in ~~connection~~the amount of $20,000,000, used in conjunction with the purchase of Mill Street Apartments. On December 20, 2019, the ~~Residence at Captain Parker Apartments, used~~Partnership paid down $2,000,000. On January 22, 2020, the ~~entire~~Partnership paid down $1,000,000. As of June 30, 2020, the line of credit along with cash reserve, to purchase the property. On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). As a resulthad an outstanding balance of securing the financing, the Partnership used the proceeds of the loan and cash reserves of the Partnership to pay down the Line of Credit to zero. A payment was made on January 7, 2016 for $23,000,000, and another payment for $2,000,000 was made on January 15, 2016.

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). As a result of securing the financing, the Partnership used the proceeds of the loan and cash reserves of the Partnership to pay down the Line of Credit to zero. A payment was made on January 7, 2016 for $23,000,000, and another payment for $2,000,000 was made on January 15, 2016.

$17,000,000.

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 distributions, 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.~~entities.

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum. The Partnership paid approximately ~~$38,000~~$5,000 in fees for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2020.

The line of credit agreement has several covenants, such as providing cash flow projections and compliance certificates, as well as other financial information. The covenants include, but are not limited to the following: maintain a leverage ratio that does not exceed 65%; aggregate increase in indebtedness of the subsidiaries and joint ventures should not exceed $15,000,000; maintain a tangible net worth (as defined in the agreement) of a minimum of $150,000,000; a minimum ratio of net operating income to total indebtedness of at least 9.5%; debt service coverage ratio of at least 1.6 to 1, as well as other items.

The Partnership is in compliance with these covenants as of ~~September~~June 30, ~~2017.~~2020.

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At ~~September~~June 30, ~~2017,~~2020, amounts received for prepaid rents of approximately ~~$2,072,000~~$2,138,000 are included in cash and cash equivalents, and security deposits of approximately ~~$2,379,000~~$2,906,000 are included in prepaid expenses and other assets and are restricted cash.

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NOTE 7. PARTNERS’ CAPITAL

The Partnership has ~~two~~2 classes of Limited Partners (Class A and B) and ~~one~~1 category of General Partner. Under the terms of the Partnership Agreement, distributions to holders of Class B Units and General Partnership Units must represent 19% and 1%, respectively, of the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

In ~~2017,~~January 2020, the Partnership ~~announced the approval of~~approved a quarterly distribution ofto its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, ~~2017, June 15, 2017, and September 15, 2017,~~2020 and payable on March 31, ~~2017, June 30, 2017, and September 30, 2017~~2020, of ~~$9.00~~$9.60 per unit ($~~0.30~~0.32 per receipt).

In ~~2016,~~April 2020, the Partnership approved a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of June 15, 2020 and payable on June 30, 2020, of $9.60 per unit ($0.32 per receipt).

In 2019, regular quarterly distributions of ~~$7.50~~$9.60 per unit ($~~0.25~~0.32 per receipt), were paid in March, June, September and December. ~~In December 2016, the Partnership paid a special distribution~~

Table of ~~$24.00 per unit ($0.80 per receipt). In 2016, the Partnership paid a total distribution of an aggregate of $54.00 per unit ($1.80 per Receipt).~~Contents

The Partnership has entered into a deposit agreement with an agent to facilitate public trading of limited partners’ interests in Class A Units. Under the terms of this agreement, the holders of Class A Units have the right to exchange each Class A Unit for 30 Depositary Receipts. The following is information per Depositary Receipt:


	Nine Months Ended
	September 30,
	2017		2016

					Six Months Ended
					June 30,
					2020		2019
Net Income per Depositary Receipt	$	1.41	$	0.91	$	0.78	$	0.89
Distributions per Depositary Receipt	$	0.90	$	0.75	$	0.64	$	0.64

NOTE 8. TREASURY UNITS

Treasury Units at ~~September~~June 30, ~~2017~~2020 are as follows:


Class A		~~44,671~~46,775
Class B		~~10,609~~11,109
General Partnership		~~559~~585
		~~55,839~~58,469

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). Over time, the General Partner has authorized increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. 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 ~~Restate~~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. From August 20, 2007 through ~~September~~June 30, ~~2017,~~2020, the Partnership has repurchased ~~1,365,306~~1,428,437 Depositary Receipts at an average price of ~~$27.14~~$28.43 per receipt (or ~~$814.20~~$852.90 per underlying Class A Unit), ~~3,072~~3,572 Class B Units and ~~162~~188 General Partnership Units, both at an average price of ~~$926.26~~$1,033.00 per Unit, totaling approximately ~~$40,274,000~~$44,718,000 including brokerage fees paid by the Partnership.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, the Partnership purchased a total of ~~549~~5,328 Depositary Receipts. The average price was ~~$62.00~~$59.14 per receipt or ~~$1,860.00~~$1,774.20 per unit. The total cost including commission was ~~$34,038.~~$315,216. The Partnership was required to repurchase ~~4.3~~42.18 Class B Units and ~~0.2~~2.22 General Partnership units at a cost of ~~$8,084~~$74,839 and ~~$425~~$3,939 respectively.

~~Table~~Given the economic uncertainty caused by the coronavirus issue, as of ~~Contents~~April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidental to its business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnership is not involved in any material pending legal proceedings.

On November 19, 2016, a pipe broke at 62 Boylston Street in Boston, MA. resulting in water damage to 24 apartments. The Partnership has insurance coverage on both the repairs and rental loss. As of September 30, 2017, the claim has been settled and the Partnership has received payments of approximately $358,000.

NOTE 10. RENTAL INCOME

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, approximately ~~93%~~95% 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

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August. Approximately 7%5% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at ~~September~~June 30, ~~2017~~2020 as follows:


	Commercial
	Property Leases
2018	$	2,697,000
2019		2,248,000
2020		1,687,000

			Commercial
			Property Leases
2021		1,396,000	$	2,659,000
2022		570,000		1,727,000
2023				1,316,000
2024				827,000
2025				242,000
Thereafter		313,000		581,000
	$	8,911,000
			$	7,352,000

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 ~~$495,000~~$251,000 and ~~$444,000~~$277,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately ~~31%~~26% of the total commercial rental income.

The following information is provided for commercial leases:


	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Throguh September 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2018	$	468,209	18,003	12	16	%
2019		672,327	24,179	12	23	%
2020		215,902	6,428	6	7	%

							Annual base				Percentage of
							rent for		Total square feet	Total number of	annual base rent for
Through June 30,							expiring leases		for expiring leases	leases expiring	expiring leases
2021		791,294	34,511	7	27	%	$	759,320	39,256	18	27	%
2022		519,397	16,343	6	17	%		605,587	24,225	8	21	%
2023		58,500	1,950	1	2	%		421,687	11,481	7	15	%
2024		251,627	6,629	2	8	%		491,548	14,668	8	17	%
2025		—	—	—	0	%		414,562	14,674	7	15	%
2026		—	—	—	0	%		—	—	—	—	%
2027		—	—	—	0	%		—	—	—	—	%
2028								—	—	—	—	%
2029								—	—	—	—	%
2030								142,450	3,850	1	5	%
Totals	$	2,977,256	108,043	46	100	%	$	2,835,154	108,154	49	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately ~~$801,000~~$730,000 and ~~$523,000~~$240,000 at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016.~~2019. Included in rents receivable at ~~September~~June 30, ~~2017~~2020 is approximately ~~$130,000~~$96,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases at 62 Boylston Street, Cypress Street, and Staples Plaza in ~~Boston,~~ Massachusetts.

Rents receivable at ~~September~~June 30, ~~2017~~2020 also includes approximately ~~$95,000~~$172,000 representing the deferral of rental concession primarily related to the residential properties.

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NOTE 11. CASH FLOW INFORMATION

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, cash paid for interest was approximately ~~$7,802,000,~~$6,611,000, and ~~$7,457,000~~$5,936,000 respectively. Cash paid for state income taxes was approximately ~~$61,000~~$81,000 and ~~$42,000~~$76,000 during the ~~nine~~six months ended ~~September~~ June 30, ~~2017~~2020 and ~~2016~~2019 respectively. Additionally, during the six months ended June 30, 2020, the Partnership was involved in a non-cash financing activity of approximately $2,393,000 in connection with the refinancing of Brookside Apartments.

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NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, 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 ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and 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.

At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, we estimated the fair value of our mortgages payable 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 ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, 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.

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

●

For cash and cash equivalents, accounts receivable, other assets, investment in partnerships, accounts payable, advance rents and security deposits: fair value approximates the carrying value of such assets and liabilities.

●

For mortgage notes payable: fair value is generally based on estimated future cash flows, which are discounted using the quoted market rate from an independent source for similar obligations. Refer to the table below for the carrying amount and estimated fair value of such instruments.

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

Carrying Amount

Estimated Fair Value

Mortgage Notes Payable

Partnership Properties

At September 30, 2017
*
$
233,615,499

$
240,513,012

At December 31, 2016
*
$
212,709,080

$
219,086,450

Investment Properties

At September 30, 2017
*
$
124,550,899

$
127,162,361

At December 31, 2016
*
$
130,152,297

$
133,991,269


		Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2020	*	$	284,402,031	$	305,678,933
At December 31, 2019	*	$	281,771,246	$	290,892,652
Investment Properties
At June 30, 2020	*	$	166,357,134	$	179,496,478
At December 31, 2019	*	$	166,404,255	$	169,988,236

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016.~~2019. 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

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financial statements since ~~September~~June 30, ~~2017~~2020 and current estimates of fair value may differ significantly from the amounts presented herein.

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NOTE 13. 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 tax free exchanges, ~~accelerated~~different depreciation methods, different tax lives, other items with limited tax deductibility and timing differences related to prepaid rents, allowances and intangible assets ~~related to~~at significant ~~acquisitions and the treatment of certain expenditures. Taxable~~acquisitions. Federal taxable income of approximately ~~$4,893,000~~$2,039,000 was approximately ~~$57,000~~$4,508,000 less than statement income for the year ended December 31, ~~2016.~~2019. The primary reason for the difference was due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. Substantial property acquisitions could also cause a significant difference between book and tax depreciation. TheFederal cumulative tax basis of the Partnership’s real estate at December 31, ~~2016~~2019 is approximately ~~$7,200,000~~$5,311,000 less than the statement basis. The primary reasons for the ~~lower~~difference in tax basis ~~were~~are tax free exchanges, accelerated depreciation and ~~accelerated~~bonus depreciation. The Partnership’s Federal tax basis in its joint venture investments is approximately ~~$2,100,000 less~~$1,688,000 more than statement ~~basis because of accelerated depreciation.~~

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

Certain entities included in the Partnership’s consolidated financial statements are subject to certain state taxes. These taxes are not significant and are recorded as operating expenses in the accompanying consolidates financial statements.

~~While allowable accelerated depreciation deductions were extended, future tax law changes may significantly affect taxable income.~~

The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustment regarding its tax accounting treatment. The Partnership expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

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 ~~September~~June 30, ~~2017,~~2020, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations ~~are~~is from the year ~~2013~~2016 forward.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The act, among other changes, increases the business interest expense limitation to 50% of adjusted taxable income for tax years beginning in 2020 for partnerships.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

~~Since November 2001,the~~The Partnership has invested in ~~nine~~7 limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with ~~three partnerships~~3 Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership ~~interest~~interests in each investment. The other investors are ~~Harold~~the Brown ~~the President of the Management Company~~Family related entities and ~~five other~~5 current and former employees of the Management Company. Harold Brown’s ownership interest iswas between ~~43.2%~~47.6% and ~~56%~~59%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, Hamilton Park Towers LLC, referred to as Dexter Park, or Hamilton Park, is a 409 unit residential complex. The purchase price was $129,500,000. The ~~total~~original mortgage was $89,914,000 with an interest rate of 5.57% and ~~it matures~~was to mature in 2019. The mortgage ~~calls~~called for interest only payments for the first two years of the loan and amortized over 30 years thereafter.

On May 31, 2018, Hamilton Park Towers, LLC , entered into a Mortgage Note with John Hancock Life Insurance Company (U.S.A.) in the principal amount of $125,000,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.99% per annum, and the principal amount of the Note is due and payable on June 1, 2028. The Note is secured by a mortgage on the Dexter Park apartment complex located at 175 Freeman Street, Brookline, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2018. The Note is guaranteed by the Partnership and HBC Holdings, LLC pursuant to a Guaranty Agreement dated May 31, 2018.

Hamilton Park used the proceeds of the loan to pay off an outstanding loan of approximately $82,000,000 and distributed approximately $41,200,000 to its’ owners. The Partnership’s share of the distribution was approximately $16,500,000. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will

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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. In connection with this refinancing, the property incurred a defeasance charge of approximately $3,830,000. Based on its’ ownership in the property, the Partnership incurred 40% of this charge, an expense of approximately $1,532,000.

At June 30, 2020, the balance ofon this mortgage before unamortized deferred financing costs is ~~approximately $82,390,000 at September 30, 2017.~~$125,000,000. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Joint Venture sold 120 units as condominiums and retained 48 units for long-term investment. In February 2007, the Joint Venture refinanced the 48 units with a new 10 year mortgage in the original amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan was to be amortized over 30 years ~~thereafter and matured in~~with a maturity date of March 2017. On March 1, 2017, the mortgage balance was paid in full, with the Partnership contributing its share of the mortgage balance of approximately $2,222,000. ~~As of September 30, 2017, 18~~After paying off the mortgage, the Partnership sold the individual units. 3 units were sold with a gain on the sales of approximately $2,355,000. An additional 6 units are under purchase and sale agreements, and the Partnership still owns 26 units. This investment is referred to as Hamilton Bay Apartments, LLC.

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~~In April 2008, a Joint Venture refinanced an additional 20 units and obtained a new mortgage~~ in the amount of $2,368,000 with interest at 5.75%, interest only, which matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the entity of $660,000. The capital was used to pay off the outstanding mortgage. During 2017, 1 unit was sold2019, resulting in a gain of approximately ~~$93,000. As of August 1, 2017,~~$429,000. In 2019, all units ~~have been~~were sold by this Joint Venture. This investment is referred to as Hamilton Bay Apartments, LLC.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, ~~one~~1 commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Joint Venture planned to operate the building and initiate development of the parking lot. In June 2007, the Joint Venture separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Joint Venture restructured the mortgages on both parcels at Essex 81. On September 28, 2015, Hamilton Essex Development, LLC paid off the outstanding mortgage balance of ~~$1,952,286.~~$1,952,286. The Partnership made a capital contribution of ~~$978,193~~$978,193 to Hamilton Essex Development LLC for its share of the funds required for the transaction. Additionally, the Partnership made a capital contribution of ~~$100,000~~$100,000 to Hamilton Essex 81, LLC. On September 30, 2015, Hamilton Essex 81, LLC obtained a new 10 year mortgage in the amount of $10,000,000, interest only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. As a result of the distribution, 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, the Partnership intends to fund its share of any future operating deficits if needed. At June 30, 2020, the balance on this mortgage before unamortized deferred financing costs is approximately $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. ~~At September 30, 2017, the balance on this mortgage before unamortized deferred financing costs is approximately $10,000,000.~~

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a ~~176‑unit~~176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Joint Venture sold 127 of the units as condominiums and retained 49 units for ~~long‑term~~long-term investment. The Joint Venture obtained a new ~~10‑year~~10-year mortgage in the amount of $5,000,000 on the units to be retained by the Joint Venture. The interest on the new loan was 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. On July 8, 2016, Hamilton 1025 LLC paid off the outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. ~~Ten~~After paying off the mortgage, the Partnership began to sell off the individual units. 2 units were sold in ~~the year ended December 31, 2016 with~~2019, resulting in a gain ~~on the sales~~ of approximately ~~$1,324,000. As of September 30, 2017, 15~~$306,000. In 2019, all residential units were ~~sold in 2017 with a gain on the sales of approximately $1,788,000. 4 units are under purchase and sales agreements and the~~sold. The Partnership still owns ~~20 units.~~the commercial building. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a ~~42‑unit~~42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Joint Venture obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Joint Venture obtained a new ~~10- year~~10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan was 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of ~~$6,000,000,~~

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$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. ~~This investment is referred to as Hamilton Minuteman, LLC.~~ At ~~September~~June 30, ~~2017,~~2020, the balance on this mortgage before unamortized deferred financing costs is approximately ~~$6,000,000.This~~$6,000,000. 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. This investment is referred to as Hamilton Minuteman, LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a ~~280‑unit~~280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. The Joint Venture sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place. In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the ~~three~~3 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 is due. The net proceeds after funding escrow accounts

~~Table of Contents~~

and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only. The Joint Venture paid off the prior mortgage of approximately ~~$15,205,000~~$15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000. At ~~September~~June 30, ~~2017,~~2020, the balance of the mortgage before unamortized deferred ~~financing costs~~finance $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 ~~approximately $16,900,000.~~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. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. The Joint Venture paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the Joint Venture made a distribution of $1,610,000 to the Partnership. As a result of the distribution, 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, the Partnership intends to fund its share of any future operating deficits if needed. At ~~September~~June 30, ~~2017,~~2020, the balance of this mortgage before unamortized deferred financing costs is approximately ~~$9,789,000.~~$9,253,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of ~~September~~June 30, ~~2017~~2020


				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total

																																	Hamilton									Hamilton			Hamilton
																														Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
																														Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,704,425		$	2,622,401		$	6,408,017		$	2,155,441		$	0		$	3,438,875		$	5,953,334		$	17,776,990		$	90,176,965		$	136,236,448	$	6,866,502		$	2,591,904		$	5,513,615		$	86,451		$	5,160,011		$	15,570,896		$	82,374,300		$	118,163,679
Cash & Cash Equivalents		147,083			92,180			67,653			200,845			20,890			583,983			55,114			33,918			666,543			1,868,209		368,053			85,827			243,868			20,661			162,471			553,842			3,049,217			4,483,939
Rent Receivable		17,530			—			32,797			10,388			1,480			7,110			4,291			16,545			122,640			212,781		343,831			43,854			6,827			—			1,407			56,713			283,270			735,902
Real Estate Tax Escrow		103,996			—			47,566			—			—			0			22,865			220,804			297,259			692,490		62,383			—			21,487			—			25,341			72,097			—			181,308
Prepaid Expenses & Other Assets		120,823			1115			59,633			704,019			263			501,895			34,110			99,569			1,405,528			2,926,955		308,350			89,788			99,498			2,341			33,062			175,465			1,857,159			2,565,663
Total Assets	$	8,093,857		$	2,715,696		$	6,615,666		$	3,070,693		$	22,633		$	4,531,863		$	6,069,714		$	18,147,826		$	92,668,935		$	141,936,883	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,889,687		$	—		$	9,717,606		$	—		$	—		$	—		$	5,885,772		$	16,788,979		$	82,268,855		$	124,550,899	$	9,927,607		$	—		$	9,199,730		$	—		$	5,908,276		$	16,833,120		$	124,488,401		$	166,357,134
Accounts Payable & Accrued Expense		90,779			1,276			78,848			35,139			1,671			28,806			68,147			159,754			784,992			1,249,412		72,016			1,599			89,688			11,438			64,549			157,567			963,724			1,360,581
Advance Rental Pmts & Security Deposits		179,143			—			229,169			25,656			101			25,355			96,224			365,091			2,329,431			3,250,170		300,200			—			308,520			—			147,506			440,458			2,682,182			3,878,866
Total Liabilities		10,159,609			1,276			10,025,623			60,795			1,772			54,161			6,050,143			17,313,824			85,383,278			129,050,481		10,299,823			1,599			9,597,938			11,438			6,120,331			17,431,145			128,134,307			171,596,581
Partners’ Capital		(2,065,752)			2,714,420			(3,409,957)			3,009,898			20,861			4,477,702			19,571			834,002			7,285,657			12,886,402		(2,350,704)			2,809,774			(3,712,643)			98,015			(738,039)			(1,002,132)			(40,570,361)			(45,466,090)
Total Liabilities and Capital	$	8,093,857		$	2,715,696		$	6,615,666		$	3,070,693		$	22,633		$	4,531,863		$	6,069,714		$	18,147,826		$	92,668,935		$	141,936,883	$	7,949,119		$	2,811,373		$	5,885,295		$	109,453		$	5,382,292		$	16,429,013		$	87,563,946		$	126,130,491
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%				50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,357,209		$	—		$	1,504,948		$	10,430		$	2,238,850		$	9,785		$	417,001		$	2,914,262			8,452,484				$	1,404,887					$	49,008												1,453,895
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,032,876)		$			$	(1,704,978)		$	—		$	—		$	—		$	—		$	—		$	—			(2,737,854)	$	(1,175,352)		$	—		$	(1,856,321)		$	—		$	(369,020)		$	(501,066)		$	(16,228,145)			(20,129,903)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	5,714,630																						$	(18,676,009)
Total units/condominiums
Apartments		48			—			40			175			120			48			42			148			409			1,030		48			—			40			175			42			148			409			862
Commercial		1			1			—			1			—			—			—			—			—			3		1			1			—			1			—			—			—			3
Total		49			1			40			176			120			48			42			148			409			1,033		49			1			40			176			42			148			409			865
Units to be retained		49			1			40			1			—			—			42			148			409			690		49			1			40			1			42			148			409			690
Units to be sold		—			—			—			175			120			48			—			—			—			343		—			—			—			—			—			—			—			—
Units sold through November 1, 2017		—			—			—			155			120			22			—			—			—			297
Units sold through August 1, 2020																															—			—			—			175			—			—			—			175
Unsold units		—			—			—			20			—			26			—			—			—			46		—			—			—			—			—			—			—			—
Unsold units with deposits for future sale as of November 1, 2017		—			—			—			4			—			6			—			—			—			10

Unsold units with deposits for future sale as of August 1, 2020																															—			—			—			—			—			—			—			—

Table of Contents

Financial information for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020


			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	820,088	$	65,862	$	847,492	$	41,117	$	581,210	$	1,803,314		8,230,449	$	12,389,532
Laundry and Sundry Income		6,683		—		625		—		626		17,355		45,708		70,997
		826,771		65,862		848,117		41,117		581,836		1,820,669		8,276,157		12,460,529
Expenses
Administrative		11,480		2,200		16,328		11,056		6,650		29,475		92,773		169,962
Depreciation and Amortization		243,569		10,149		169,036		1,632		173,780		524,133		1,838,920		2,961,219
Management Fees		28,052		2,203		32,296		1,645		23,004		67,729		166,246		321,175
Operating		46,299		—		28,764		96		50,654		177,595		529,844		833,252
Renting		3,404		—		9,682		—		5,750		15,493		30,883		65,212
Repairs and Maintenance		67,209		3,046		43,375		—		38,950		233,991		511,248		897,819
Taxes and Insurance		129,401		30,457		79,714		8,680		72,176		232,474		1,138,952		1,691,854
		529,414		48,055		379,195		23,109		370,964		1,280,890		4,308,866		6,940,493
Income Before Other Income		297,357		17,807		468,922		18,008		210,872		539,779		3,967,291		5,520,036
Other Income (Loss)
Interest Expense		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
		(172,091)		—		(186,408)		—		(118,502)		(382,787)		(2,536,786)		(3,396,574)
Net Income (Loss)	$	125,266	$	17,807	$	282,514	$	18,008	$	92,370	$	156,992	$	1,430,505	$	2,123,462
Net Income (Loss)—NERA 50%	$	62,632	$	8,903	$	141,257	$	9,004	$	46,185	$	78,495				346,476
Net Income —NERA 40%													$	572,202		572,202
															$	918,678

Hamilton





Hamilton



Hamilton


Hamilton




Hamilton

Essex

345

Hamilton

Bay

Hamilton

Minuteman

on Main

Dexter

Essex 81

Development

Franklin

1025

Sales

Bay Apts

Apts

Apts

Park

Total

Revenues

Rental Income

$
1,120,743

$
173,928

$
1,095,674

$
308,579

$
6,822

$
499,341

$
775,327

$
2,499,765

11,187,036

$
17,667,215

Laundry and Sundry Income

10,415

—

3,860

—

—

—

1,945

28,437

69,801

114,458

1,131,158

173,928

1,099,534

308,579

6,822

499,341

777,272

2,528,202

11,256,837

17,781,673

Expenses

Administrative

20,400

1,275

21,302

3,150

3,706

7,142

3,871

25,920

141,477

228,243

Depreciation and Amortization

341,332

2,122

260,841

136,877

41,750

243,755

261,519

747,077

2,515,224

4,550,497

Management Fees

46,989

6,957

45,786

11,084

245

18,332

30,327

99,767

240,952

500,439

Operating

55,178

—

51,188

305

38

2,289

75,819

256,589

872,244

1,313,650

Renting

26,618

—

29,166

392

181

241

5,044

31,162

124,525

217,329

Repairs and Maintenance

136,821

3,180

89,973

177,987

3,326

253,489

59,922

486,489

1,108,085

2,319,272

Taxes and Insurance

180,881

44,059

97,973

80,038

1,850

117,587

95,737

327,807

1,290,936

2,236,868

808,219

57,593

596,229

409,833

51,096

642,835

532,239

1,974,811

6,293,443

11,366,298

Income Before Other Income

322,939

116,335

503,305

(101,254)

(44,274)

(143,494)

245,033

553,391

4,963,394

6,415,375

Other Income (Loss)

Interest Expense

(256,232)

—

(295,670)

(967)

(2)

(41,876)

(177,821)

(577,041)

(3,583,723)

(4,933,332)

Gain on Sale of Real Estate

—

—

—

1,787,816

93,392

2,355,141

—

—

—

4,236,349

(256,232)

—

(295,670)

1,786,849

93,390

2,313,265

(177,821)

(577,041)

(3,583,722)

(696,983)

Net Income (Loss)

$
66,707

$
116,335

$
207,635

$
1,685,595

$
49,116

$
2,169,771

$
67,212

$
(23,650)

$
1,379,672

$
5,718,392

Net Income (Loss)—NERA 50%

$
33,354

$
58,167

$
103,818

$
842,798

$
24,559

$
1,084,886

$
33,606

$
(11,824)

2,169,362

Net Income —NERA 40%


$
551,869

551,869

$
2,721,231

Table of Contents

Financial information for the three months ended ~~September~~June 30, ~~2017~~

Hamilton





Hamilton



Hamilton

Hamilton




Hamilton

Essex

345

Hamilton

Bay

Hamilton

Minuteman

on Main

Dexter

Essex 81

Development

Franklin

1025

Sales

Bay Apts

Apts

Apts

Park

Total

Revenues

Rental Income

$
397,458

$
53,928

$
368,508

$
71,380

$
1,540

$
101,378

$
258,529

$
844,532

$
3,641,073

$
5,738,326

Laundry and Sundry Income

2,825

—

1,723

—

—

—

675

10,069

20,863

36,155

400,283

53,928

370,231

71,380

1,540

101,378

259,204

854,601

3,661,936

5,774,481

Expenses

Administrative

10,470

425

7,262

967

1,558

1,945

1,460

8,683

46,207

78,977

Depreciation and Amortization

114,334

707

87,406

45,626

80,190

41,157

87,709

256,859

846,501

1,560,489

Management Fees

15,011

2,157

16,322

2,281

37

3,463

9,858

33,685

65,484

148,298

Operating

15,471

—

14,768

205

—

915

23,816

73,397

254,581

383,153

Renting

17,102

—

16,918

60

—

60

941

9,764

73,767

118,612

Repairs and Maintenance

87,270

—

38,542

62,270

226

60,661

20,636

159,062

517,242

945,909

Taxes and Insurance

59,780

14,979

31,003

23,473

637

30,239

32,843

109,391

431,311

733,656

319,438

18,268

212,221

134,882

82,648

138,440

177,263

650,841

2,235,093

3,969,094

Income Before Other Income

80,845

35,660

158,010

(63,502)

(81,108)

(37,062)

81,941

203,760

1,426,843

1,805,387

Other Income (Loss)

Interest Expense

(91,838)

—

(97,877)

(190)

—

(135)

(59,802)

(194,143)

(1,201,752)

(1,645,737)

Interest Income

—

—

—

—

—

—

—

—

—

—

Gain on sale of real estate

—

—

—

848,484

1,017,221

—

—

—

1,865,705

(91,838)

—

(97,877)

848,294

—

1,017,086

(59,802)

(194,143)

(1,201,752)

219,968

Net Income (Loss)

$
(10,993)

$
35,660

$
60,133

$
784,792

$
(81,108)

$
980,024

$
22,139

$
9,617

$
225,091

$
2,025,355

Net Income (Loss)—NERA 50%

$
(5,497)

$
17,830

$
30,067

$
392,396

$
(40,554)

$
490,012

$
11,070

$
4,809

900,132

Net Income (Loss)—NERA 40%


$
90,037

90,037

$
990,169

2020


			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	380,708	$	5,391	$	419,342	$	20,558	$	290,517	$	897,613	$	4,023,946	$	6,038,075
Laundry and Sundry Income		3,298		—		171		—		626		8,606		19,966		32,667
		384,006		5,391		419,513		20,558		291,143		906,219		4,043,912		6,070,742
Expenses
Administrative		5,293		1,550		8,572		931		4,168		13,627		45,721		79,862
Depreciation and Amortization		121,927		5,075		84,541		816		86,954		263,086		921,932		1,484,331
Management Fees		10,316		—		15,829		822		11,472		32,745		79,163		150,347
Operating		20,776		—		15,776		51		28,428		83,750		219,463		368,244
Renting		629		—		929		—		2,750		7,773		14,080		26,161
Repairs and Maintenance		40,200		3,046		21,797		—		28,056		99,155		224,236		416,490
Taxes and Insurance		64,724		15,238		39,808		4,492		36,125		109,712		562,731		832,830
		263,865		24,909		187,252		7,112		197,953		609,848		2,067,326		3,358,265
Income Before Other Income		120,141		(19,518)		232,261		13,446		93,190		296,371		1,976,586		2,712,477
Other Income (Loss)
Interest Expense		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Interest Income		—		—		—		—		—		—		—		—
Gain on sale of real estate		—		—		—				—		—		—		—
		(71,358)		—		(92,983)		—		(59,242)		(190,404)		(1,268,682)		(1,682,669)
Net Income (Loss)	$	48,783	$	(19,518)	$	139,278	$	13,446	$	33,948	$	105,967	$	707,904	$	1,029,808
Net Income (Loss)—NERA 50%	$	24,392	$	(9,758)	$	69,639	$	6,723	$	16,974	$	52,984				160,953
Net Income (Loss)—NERA 40%													$	283,162		283,162
															$	444,115

~~Table of Contents~~

Future annual mortgage maturities at ~~September~~June 30, ~~2017~~2020 are as follows:

Hamilton

345

Hamilton

Hamilton

Hamilton

Hamilton on

Dexter

Period End

Essex 81

Franklin

1025

Bay Apts

Minuteman

Main Apts

Park

Total

9//30/2018

$
—

$
188,419

$
—

$
—

$
—

$
—

$
1,653,563

$
1,841,982

9/30/2019

—

195,841

—

—

—

—

1,748,055

1,943,896

9/30/2020

—

203,556

—

—

—

—

78,988,089

79,191,645

9/30/2021

—

211,575

—

—

—

—

211,575

9/30/2022

—

219,910

—

—

—

—

—

219,910

Thereafter

10,000,000

8,769,884

—

—

6,000,000

16,900,000

—

41,669,884

10,000,000

9,789,185

—

—

6,000,000

16,900,000

82,389,707

125,078,892

Less: unamortized deferred financing costs

(110,313)

(71,579)

—

—

(114,228)

(111,021)

(120,852)

(527,993)

$
9,889,687

$
9,717,606

$
—

$
—

$
5,885,772

$
16,788,979

$
82,268,855

$
124,550,899


	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
6/30/2021	$	—	$	209,541	$		$	—	$		$	209,541
6/30/2022		—		217,796				—				217,796
6/30/2023		—		226,376		—		—				226,376
6/30/2024		—		235,293		—		—				235,293
6/30/2025		—		244,563		—		16,900,000				17,144,563
Thereafter		10,000,000		8,119,429		6,000,000		—		125,000,000		149,119,429
		10,000,000		9,252,998		6,000,000		16,900,000		125,000,000		167,152,998
Less: unamortized deferred financing costs		(72,393)		(53,268)		(91,724)		(66,880)		(511,599)		(795,864)
	$	9,927,607	$	9,199,730	$	5,908,276	$	16,833,120	$	124,488,401	$	166,357,134

At ~~September~~June 30, ~~2017~~2020 the weighted average interest rate on the above mortgages was ~~5.00%~~3.91%. The effective rate was ~~5.08%~~3.98% including the amortization expense of deferred financing costs.

Table of Contents

Summary financial information ~~as of September~~at June 30, ~~2016~~2019


				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total

																																	Hamilton												Hamilton			Hamilton
																														Hamilton			Essex			345			Hamilton			Hamilton			Minuteman			on Main			Dexter
																														Essex 81			Development			Franklin			1025			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,129,487		$	2,616,545		$	6,521,385		$	4,074,383		$	124,752		$	5,956,617		$	6,206,120		$	17,972,191		$	92,473,236		$	144,074,716	$	7,009,806		$	2,594,393		$	5,833,501		$	89,352		$			$	5,479,383		$	16,288,449		$	85,469,775	��	$	122,764,659
Cash & Cash Equivalents		142,274			52,323			199,544			155,921			97,332			1,121			89,502			100,273			1,036,851			1,875,141		371,049			141,625			223,371			271,833			19,616			132,837			166,951			2,443,433			3,770,715
Rent Receivable		49,547						18,009			35,302			3,000			15,687			980			20,473			288,807			431,805		246,158			21,570			4,240			—			—			480			22,923			99,756			395,127
Real Estate Tax Escrow		81,827						45,014			659,841			171			44,049			37,762			135,659			216,881			1,221,204		74,605			—			20,314			—			—			27,807			96,530			—			219,256
Prepaid Expenses & Other Assets		172,746			982			54,156			0			0			78,234			67,687			94,299			1,978,426			2,446,530		286,887			107,376			60,279			1,199			5,189			14,264			213,740			1,216,087			1,905,021
Total Assets	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,875,898		$	—		$	9,892,225		$	0		$	—		$	4,447,269		$	5,877,338		$	16,772,927		$	83,686,335		$	130,551,992	$	9,913,818		$	—		$	9,394,671		$	—		$	—		$	5,900,093		$	16,817,068		$	124,423,778		$	166,449,428
Accounts Payable & Accrued Expense		59,117			1,275			78,095			51,206			3,947			9,809			42,713			140,981			693,424			1,080,567		121,192			2,811			82,534			18,162			4,048			56,897			232,031			799,246			1,316,921
Advance Rental Pmts& Security Deposits		225,843			—			245,904			79,732			2,380			93,716			112,168			361,929			2,493,486			3,615,158		311,817			—			322,013			6,305			101			129,339			441,388			3,224,176			4,435,139
Total Liabilities		10,160,858			1,275			10,216,224			130,938			6,327			4,550,794			6,032,219			17,275,837			86,873,245			135,247,717		10,346,827			2,811			9,799,218			24,467			4,149			6,086,329			17,490,487			128,447,200			172,201,488
Partners’ Capital		(1,584,977)			2,668,575			(3,378,116)			4,794,509			218,928			1,544,914			369,832			1,047,058			9,120,956			14,801,679		(2,358,322)			2,862,153			(3,657,513)			337,917			20,656			(431,558)			(701,894)			(39,218,149)			(43,146,710)
Total Liabilities and Capital	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396	$	7,988,505		$	2,864,964		$	6,141,705		$	362,384		$	24,805		$	5,654,771		$	16,788,593		$	89,229,051		$	129,054,778
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%				50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,334,288		$	—		$	2,397,254		$	109,464		$	772,457		$	184,916		$	523,529		$	3,648,382			8,970,289	$	—		$	1,431,077		$	—		$	168,959		$	10,327		$	—		$	—		$	—			1,610,362
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(792,488)		$	—		$	(1,689,058)		$	—		$	—		$	—		$	—		$	—		$	—			(2,481,546)	$	(1,179,161)		$	—		$	(1,828,757)		$	—		$	—		$	(215,779)		$	(350,947)		$	(15,687,260)			(19,261,903)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,488,743																									$	(17,651,541)
Total units/condominiums
Apartments		48			—			40			175			120			48			42			148			409			1,030		48			—			40			175			48			42			148			409			910
Commercial		1			1			—			1			—			—			—			—			—			3		1			1			—			1			—			—			—			—			3
Total		49			1			40			176			120			48			42			148			409			1,033		49			1			40			176			48			42			148			409			913
Units to be retained		49			1			40			0			—			0			42			148			409			689		49			1			40			1			—			42			148			409			690
Units to be sold		—			—			—			176			120			48			—			—			—			344		—			—			—			175			48			—			—			—			223
Units sold through May1, 2016		—			—			—			133			119			—			—			—			—			252
Units sold through August 1, 2019																															—			—			—			171			44			—			—			—			215
Unsold units		—			—			—			43			1			—			—			—			—			44		—			—			—			4			4			—			—			—			8
Unsold units with deposits for future sale as of November 1, 2016		—			—			—			3			—			—			—			—			—			3
Unsold units with deposits for future sale as of August 1, 2019																															—			—			—			1			2			—			—			—			3

Table of Contents

Financial information for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2019

Hamilton





Hamilton



Hamilton

Hamilton




Hamilton

Essex

345

Hamilton

Bay

Hamilton

Minuteman

on Main

Dexter

Essex 81

Development

Franklin

1025

Sales

Bay Apts

Apts

Apts

Park

Total

Revenues

Rental Income

$
1,139,145

$
180,000

$
1,089,610

$
650,328

$
36,315

$
724,848

$
742,872

$
2,425,746

$
11,026,501

$
18,015,365

Laundry and Sundry Income

11,032

—

2,823

—

—

—

343

31,445

76,124

121,767

1,150,177

180,000

1,092,433

650,328

36,315

724,848

743,215

2,457,191

11,102,625

18,137,132

Expenses

Administrative

25,757

1,314

23,269

8,429

5,312

8,257

5,225

31,677

137,958

247,198

Depreciation and Amortization

338,820

2,122

260,819

177,062

18,876

238,807

254,869

718,340

2,435,762

4,445,477

Management Fees

47,267

7,200

45,858

24,220

1,412

28,568

30,392

97,873

238,441

521,231

Operating

74,431

—

53,336

732

257

1,364

66,845

232,598

876,054

1,305,617

Renting

23,804

—

14,910

1,789

—

4,354

5,621

13,106

193,381

256,965

Repairs and Maintenance

120,332

3,150

48,832

232,398

18,756

305,491

65,358

407,989

1,113,528

2,315,834

Taxes and Insurance

171,345

44,664

94,429

121,614

8,371

124,296

90,496

365,969

1,136,580

2,157,764

801,756

58,450

541,453

566,244

52,984

711,137

518,806

1,867,552

6,131,704

11,250,086

Income Before Other Income

348,421

121,550

550,980

84,084

(16,669)

13,711

224,409

589,639

4,970,921

6,887,046

Other Income (Loss)

Interest Expense

(214,415)

—

(298,442)

(149,327)

(65)

(196,329)

(226,672)

(577,942)

(3,657,249)

(5,320,441)

Interest Income

—

—

—

10

—

—

—

—

10

Gain on Sale of Real Estate

—

—

—

802,129

335,321

—

—

—

—

1,137,450

(214,415)

—

(298,442)

652,812

335,256

(196,329)

(226,672)

(577,942)

(3,657,249)

(4,182,981)

Net Income (Loss)

$
134,006

$
121,550

$
252,538

$
736,896

$
318,587

$
(182,618)

$
(2,263)

$
11,697

$
1,313,672

$
2,704,065

Net Income (Loss)—NERA 50%

$
67,003

$
60,775

$
126,269

$
368,448

$
159,294

$
(91,309)

$
(1,132)

$
5,849

695,197

Net Income (Loss)—NERA 40%


$
525,469

525,469

$
1,220,666


			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	910,111	$	101,241	$	803,093	$	47,061	$	3,629	$	556,069	$	1,688,003	$	8,060,966	$	12,170,173
Laundry and Sundry Income		6,870		—		584		—		—		2,135		20,080		48,720		78,389
		916,981		101,241		803,677		47,061		3,629		558,204		1,708,083		8,109,686		12,248,562
Expenses
Administrative		15,255		9,674		10,043		4,402		4,214		5,750		34,912		95,917		180,167
Depreciation and Amortization		239,432		10,149		172,453		6,391		5,420		177,501		519,106		1,807,214		2,937,666
Management Fees		34,227		4,320		30,443		1,899		145		22,299		65,003		168,653		326,989
Operating		37,045		8		40,524		862		—		51,579		191,817		599,340		921,175
Renting		8,517		—		11,993		—		—		2,574		33,490		54,549		111,123
Repairs and Maintenance		64,670		3,180		42,277		28,399		10,266		82,321		317,086		563,942		1,112,141
Taxes and Insurance		123,306		30,860		75,609		14,445		5,206		64,769		207,339		1,035,769		1,557,303
		522,452		58,191		383,342		56,398		25,251		406,793		1,368,753		4,325,384		7,146,564
Income Before Other Income		394,529		43,050		420,335		(9,337)		(21,622)		151,411		339,330		3,784,302		5,101,998
Other Income (Loss)
Interest Expense		(243,020)		—		(189,082)		—		(6)		(116,605)		(380,539)		(2,537,735)		(3,466,987)
Gain on Sale of Real Estate		—		—		—		306,075		432,908		—		—		—		738,983
		(243,020)		—		(189,082)		306,075		432,902		(116,605)		(380,539)		(2,537,735)		(2,728,004)
Net Income (Loss)	$	151,509	$	43,050	$	231,253	$	296,738	$	411,280	$	34,806	$	(41,209)	$	1,246,567	$	2,373,994
Net Income (Loss)—NERA 50%	$	75,755	$	21,525	$	115,627	$	148,369	$	205,641	$	17,403	$	(20,605)				563,715
Net Income (Loss)—NERA 40%															$	498,630		498,630
																	$	1,062,345

Financial information for the three months ended ~~September~~June 30, ~~2016~~2019

Hamilton





Hamilton



Hamilton

Hamilton




Hamilton

Essex

345

Hamilton

Bay

Hamilton

Minuteman

on Main

Dexter

Essex 81

Development

Franklin

1025

Sales

Bay Apts

Apts

Apts

Park

Total
Revenues

Rental Income

$
371,228

$
60,000

$
364,649

$
177,852
��
$
8,625

$
230,491

$
251,118

$
820,748

$
3,614,525

$
5,899,236
Laundry and Sundry Income

2,675

—

725

—

—

—

44

10,811

21,478

35,733

373,903

60,000

365,374

177,852

8,625

230,491

251,162

831,559

3,636,003

5,934,969
Expenses

Administrative

5,660

425

7,071

5,684

2,328

2,386

2,625

11,545

40,757

78,481
Depreciation and Amortization

113,626

707

86,988

58,998

6,292

79,953

85,288

241,279

817,710

1,490,841
Management Fees

17,216

2,400

15,033

6,293

336

8,964

10,469

33,611

73,108

167,430
Operating

24,073

—

16,670

147

58

356

20,614

81,583

267,793

411,294
Renting

16,965

—

4,369

—

—

3,400

819

3,590

137,786

166,929
Repairs and Maintenance

44,248

—

19,499

76,499

5,187

104,886

(45,582)

180,736

520,451

905,924
Taxes and Insurance

56,037

14,062

30,006

35,405

1,300

40,318

30,997

110,147

402,822

721,094

277,825

17,594

179,636

183,026

15,501

240,263

105,230

662,491

2,260,427

3,941,993
Income Before Other Income

96,078

42,406

185,738

(5,174)

(6,876)

(9,772)

145,932

169,068

1,375,576

1,992,976
Other Income (Loss)

Interest Expense

(72,768)

—

(99,433)

(10,638)

(6)

(65,351)

(74,324)

(194,071)

(1,222,601)

(1,739,192)
Interest Income

—

—

—

1

—

—

—

—

—

1
Gain on sale of Real Estate

—

—

—

802,129

99,851

—

—

—

—

901,980

(72,768)

—

(99,433)

791,492

99,845

(65,351)

(74,324)

(194,071)

(1,222,601)

(837,211)
Net Income (Loss)

$
23,310

$
42,406

$
86,305

$
786,318

$
92,969

$
(75,123)

$
71,608

$
(25,003)

$
152,975

$
1,155,765
Net Income (Loss)—NERA 50%

$
11,655

$
21,203

$
43,153

$
393,159

$
46,485

$
(37,562)

$
35,804

$
(12,502)

501,395
Net Income (Loss)—NERA 40%


$
61,189

61,189

$
562,584


			Hamilton								Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	450,538	$	25,951	$	417,850	$	23,466	$	—	$	281,232	$	865,335	$	4,032,707	$	6,097,079
Laundry and Sundry Income		3,865		—		(805)		—		—		228		10,018		24,695		38,001
		454,403		25,951		417,045		23,466		—		281,460		875,353		4,057,402		6,135,080
Expenses
Administrative		9,876		7,582		4,653		2,708		841		2,034		17,065		40,385		85,144
Depreciation and Amortization		119,887		5,075		86,226		3,195		—		88,906		260,668		907,113		1,471,070
Management Fees		17,021		2,160		16,387		934		—		11,232		33,135		82,504		163,373
Operating		15,594		—		17,921		88		37		27,824		84,527		217,696		363,687
Renting		5,187		—		8,473		—		—		542		17,378		34,886		66,466
Repairs and Maintenance		26,786		3,180		23,810		20,359		—		45,649		192,894		307,357		620,035
Taxes and Insurance		61,476		15,183		35,369		7,096		300		32,518		102,907		517,043		771,892
		255,827		33,180		192,839		34,380		1,178		208,705		708,574		2,106,984		3,541,667
Income Before Other Income		198,576		(7,229)		224,206		(10,914)		(1,178)		72,755		166,779		1,950,418		2,593,413
Other Income (Loss)
Interest Expense		(122,015)		—		(94,834)		—		—		(58,613)		(192,271)		(1,267,633)		(1,735,366)
Interest Income		—		—		—		305,320		—		—		—		—		305,320
		(122,015)		—		(94,834)		305,320		—		(58,613)		(192,271)		(1,267,633)		(1,430,046)
Net Income (Loss)	$	76,561	$	(7,229)	$	129,372	$	294,406	$	(1,178)	$	14,142	$	(25,492)	$	682,784	$	1,163,367
Net Income (Loss)—NERA 50%	$	38,281	$	(3,614)	$	64,686	$	147,203	$	(589)	$	7,071	$	(12,746)				240,292
Net Income (Loss)—NERA 40%															$	273,114		273,114
																	$	513,406

Table of Contents

NOTE 15. EMPLOYEE BENEFIT 401(k) PLANS

Effective January 1, 2019, employees of the Partnership, who meet certain minimum age and service requirements, are eligible to participate in the Management Company’s 401(k) Plan (the “401(k) Plan”). Eligible employees may elect to defer up to 90 percent of their eligible compensation on a pre-tax basis to the 401(k) Plan, subject to certain limitations imposed by federal law.

The amounts contributed by employees are immediately vested and non-forfeitable. Beginning January 1, 2019, the Partnership matched 50% up to 6% of compensation deferred by each employee in the 401(k) plan. The Partnership may make discretionary matching or profit-sharing contributions to the 401(k) Plan on behalf of eligible participants in any plan year. 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 six months ended June 30, 2020 was $22,000.

NOTE ~~15.~~16. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In ~~February 2016,~~April 2020, the FASB issued ~~ASU 2016-02, modifying~~a Staff Question & Answer (“Q&A”) which was intended to reduce the ~~principles for~~challenges of evaluating the ~~recognition, measurement, presentation~~enforceable rights and ~~disclosure~~obligations of leases for ~~both parties~~concessions granted to ~~a contract (i.e.~~ lessees ~~and lessors). The new standard requires lessees~~in response to ~~apply a dual approach, classifying leases as either finance or operating leases based~~the novel coronavirus disease (“COVID-19”), which was characterized on ~~the principle of whether or not the lease is effectively a financed purchase~~March 11, 2020 by the ~~lessee. This classification will~~World Health Organization as a pandemic. Prior to this guidance, the Partnership was required to determine, ~~whether lease expense is recognized based on an effective interest method or~~ on a ~~straight line~~lease by lease basis, if a lease concession should be accounted for as a lease modification, potentially resulting in any lease concessions granted being recorded as a reduction to revenue on a straight-line basis over the ~~term~~remaining terms of the leases. The Q&A allows both lessors and lessees to bypass this analysis and elect not to evaluate whether concessions provided in response to the COVID-19 pandemic are lease ~~respectively. A lessee~~modifications. This relief is ~~also required~~subject to ~~record~~certain conditions being met, including ensuring the total remaining lease payments are substantially the same or less as compared to the original lease payments prior to the concession being granted. The Partnership has elected to apply such relief and will therefore not evaluate if lease concessions that were granted in response to the COVID-19 pandemic meet the definition of a ~~right-of-use asset~~lease modification. Accordingly, the Partnership accounted for qualifying rent concessions as negative variable lease payments, which reduced revenue from such leases in the period the concessions were granted.

NOTE 17—SUBSEQUENT EVENTS

From July 1, 2020 through August 6, 2020, the Partnership purchased 0 Depository Receipts.

The current outbreak of the COVID-19 virus, which was characterized on March 11, 2020 by the World Health Organization as a pandemic, has currently resulted in a worldwide health crisis, which is adversely affecting international, national and local economies and financial markets generally, and continues to have an unprecedented effect on the rental housing and commercial property markets. Given the continuous evolution of the COVID-019 pandemic and the global response to curb its spread, the Partnership is not able to estimate the resulting effects on its results of operations, cash flows, financial condition, or liquidity for the year ending December 31, 2020 or beyond.

The Government’s measures put into place to combat the spread of the virus have caused significant disruptions to life and business operations in Massachusetts, the country and the world. The length and severity of the current recession and the effects on the Partnership’s business are unknown at this time.

During the current state of emergency, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants. Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe. Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services. Leasing is limited to unoccupied units and a ~~lease liability~~web based video technology is being used to remotely show apartments. Hamilton and the Partnership will continue to adjust their business practices to comply with Federal and State mandates for ~~all leases with a term~~workplace and rental property operations.

Table of ~~greater than 12 months regardless~~Contents

Massachusetts has passed an emergency law to stop evictions during the Covid-19 state of ~~their classification. Leases with a term of 12 months or less will be accounted for in~~emergency.The moratorium has been extended through October17, 2020.Past due rents receivable have increased and the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The guidance supersedes previously issued guidance under ASC Topic 840 “Leases”. The guidance is effective on January 1, 2019, with early adoption permitted. The Partnership is currently ~~in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Partnership’s consolidated financial statements.~~

~~In March 2016, the FASB issued ASU 2016-07, which eliminates a requirement~~experiencing significantly higher vacancies for the retroactive adjustment on a step by step basis of the investment, results of operations, and retained earnings as if the equity method had been effective during all previous periods that the investment had been held when an investment qualifies for equity method accounting due to an increase in the level of ownership or degree of influence. The cost of acquiring the additional interest in the investee is to be added to the current basis of the investor’s previously held interest and the equity method of accounting should be adopted as of the date the investment becomes qualified for equity method accounting. This guidance is to be applied on a prospective basis and is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The adoption of ASU 2016-07 will have no significant impact on the Partnership’s consolidated financial statements. upcoming rental season.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses eight specific cash flow issues and intends to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Partnership is currently in the process of evaluating the impact the adoption of ASU 2016-15 will have on the Partnership’s consolidated statement of cash flows.

~~NOTE 16. SUBSEQUENT EVENTS~~

As of September 30, 2017, the credit line had an outstanding balance of $25,000,000, which was used on July 6, 2017, in conjunction with a loan of $16,000,000 from HBC Holdings, LLC, a Massachusetts Limited Liability company controlled by Harold Brown, and cash reserves, to purchase Woodland Park Partners, LLC (“Woodland Park”). The loan from HBC was paid off on September 29, 2017 from the proceeds of the loan from Keybank.

The Line of Credit was paid down by $8,000,000 on October 5, 2017. The Line of Credit agreement originally expired on July 31, 2017, and has subsequently been extended until October 31, 2020. The cost associated with the extension will be approximately $125,000.

In October 2017, the Partnership announced that it will make its regular quarterly distribution and a special distribution to its Class A Limited Partners and holders of Depository Receipts of record as of December 15, 2017. The regular distribution will be $9.00 per unit ($0.30 per depository receipt), and the special distribution will be $28.20 per unit ($0.94 per depository receipt).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

Certain information contained herein includes forward looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Liquidation Reform Act of 1995 (the “Act”). Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management’s good faith belief when those statements are made, and are based on information currently available to management. Caution should be exercised in interpreting and relying on such forward looking statements, the realization of which may be impacted by known and unknown risks and uncertainties, events that may occur subsequent to the forward looking statements, and other factors which may be beyond the Partnership’s control and which can materially affect the Partnership’s actual results, performance or achievements for ~~2017~~2020 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Since the Partnership’s long-term goals include the acquisition of additional properties, a portion of the proceeds from the refinancing and sale of properties is reserved for this purpose. If available acquisitions do not meet the Partnership’s investment criteria, the Partnership may purchase additional depositary receipts. 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.

The ~~third~~current outbreak of the COVID- 19, a novel strain of coronavirus, has resulted in the World Health Organization declaring a global pandemic on March 11, 2020. On March 10, the governor of Massachusetts, Charlie Baker, declared a state of emergency and ordered all non-essential businesses closed and prohibited the gathering of 10 or more people. The Governor’s order has since been subsequently modified, but is currently in place for the foreseeable future. Additionally, March saw the closure of local colleges and universities for the balance of the academic year. On-campus summer programs were cancelled and discussions are underway as to how and if colleges and universities are to re-open in September.

The government’s measures put into place to combat the spread of the virus have caused significant disruptions to life and business operations in Massachusetts, the country and the world. The length and severity of the current recession and the effects on the Partnership’s business are unknown at this time.

Rental collections for the second quarter ~~results~~for the Partnership’s wholly owned properties were approximately 90% of rents due. Residential tenants paid approximately 92% of their rent and commercial tenants paid approximately 62% of theirs. Historically, commercial rents represent 5% of the Partnership’s revenue. The rent collections for the Joint Ventures were approximately 91%. The second quarters’ collections are not necessarily an indicator of future cash receipts. As of June 30, 2020, Gross rents receivable increased approximately $908,000 over the ~~product~~March 31, 2020 balances.

Massachusetts has passed an emergency law to stop evictions during the Covid-19 state of ~~months~~emergency. The moratorium on evictions has been extended through October 17, 2020.

Vacancy rates for the Partnership’s residential properties as of ~~preparation leading up~~August 1, 2020 were 6.3% as compared with a vacancy rate of 3.2% as of August 1, 2019. With the uncertainties with the economy and the re-opening of Colleges and Universities in the fall, this year’s rental season started off slowly and has just recently started to improve. However, the inventory of unrented units is significantly higher than in past years. If these units are not rented prior to the ~~height~~end of September, it is likely that the Partnership will have a high number of vacancies for the balance of 2020.

Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the ~~renewal~~year. Given the current economic environment, it is not possible to estimate the amount of lease turnover we will experience or the amount of increases to or decreases from the current rental rates we

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will realize with lease renewals or new leases. However,we are currently offering reduced rental rates and significant rent concessions at certain properties.

The Partnership currently leases approximately 15% of its apartment units and 57% of the Joint Venture apartment units to Students. If colleges and universities do not open in September, there is likely to be a significant effect on the occupancy rates and rental income of the Partnership.

During the current state of emergency, The Hamilton Company, the Partnership’s property manager, has taken steps to maintain the safety of its employees and tenants. Hamilton is providing essential services to ensure all properties are kept open, fully functioning and safe. Hamilton has implemented a work from home policy with a skeleton staff present at all site offices to provide for property management, maintenance, leasing and construction services. Leasing is limited to unoccupied units unless permission is granted by the current tenant and a web based video technology is being used to remotely show apartments. Hamilton and the Partnership will continue to adjust their s business practices to comply with Federal and State mandates for workplace and rental property operations.

During the second quarter of 2020, rents increased on average of 3.6% for renewals and decreased on average of 0.1% for new ~~lease season. Overall year to date revenue increases have surpassed~~leases. For the ~~national average by a factor~~balance of ~~two according~~2020, due to the ~~most recent Matrix Yardi Third Quarter National Report,~~ongoing global coronavirus pandemic, management expects a ~~leading~~significant softening of the local real estate market and ~~commercial data platform. However, Management believes~~is experiencing a decrease in rent and more rent concessions.

For the ~~fourth~~second quarter ~~will reveal~~of 2020, including the ~~full impact~~purchase of ~~the revenue gains which will be sustained through June of 2018 and Management is confident these gains will be similar to 2017.~~

While the local economy is operating robustly and employment levels are higher than the national average, Management believes the higher than average annual rent increases of the past four to five years enjoyed by the Partnership are likely to soften in the third and fourth quarters of 2018. Management’s portfolio of apartment communities within the Partnership together with its other holdings provide an excellent cross section of empirical operating data including occupancy levels and general demand for housing throughout eastern Massachusetts. Drawing on this wider pool of apartment experiences, Management believes the current growing supply in Greater Boston coupled with a straining rent affordability index has created head winds that will dampen rental increases for third and fourth quarters of 2018. While demand is extremely high for most of the Partnership's properties due to its appeal to renters by necessity, Management believes the industry as a whole will take a pause before further significant revenue increases are warranted.

~~As noted in the financial presentation which includes the acquisition of Woodland Park,~~Mill Street, consolidated revenue increased by ~~5.97%~~5.1%, operating expenses increased by 8.7% and ~~NOI (income~~Income before ~~other income, depreciation~~Other Income (Expense) decreased by 2.9%. Excluding the Mill Street acquisition, same store revenue decreased by 1.4%, operating expenses decreased by 4.3% and ~~amortization)~~Income before Other Income (Expense) grew by ~~7.28% compared to 2016 Year To Date results.~~5.0%. For the same reporting period, vacancy was 6.2% vs 3.2%. Excluding ~~the recent acquisition~~Depreciation and Amortization, same store revenues (excluding Mill Street) decreased by 1.5%, operating expenses decreased by 5.8% and Net Operating Income increased by 2.3%.

The Joint Ventures of Woodland Park, Same Store Revenue, Operating Expense, excluding depreciation and amortization and NOI grew by 4.2%, 2.8% and 5.4% respectively. Our focus on all three phases of operations, Revenue, Expense and Capital Improvements is reflected in the above stated results. Management believes these operating experiences will continue through the remainder of 2017 and first half of 2018.

~~Unit sales at the Joint Venture properties located at~~ 1025 Hancock ~~Street~~ and Hamilton Bay ~~continue~~in 2019 sold out all remaining residential condominium units. 1025 Hancock sold 2 remaining units for a gain of approximately $306,000, and Hamilton Bay sold its 3 remaining units at a gain of approximately $429,000. The estimated profit to ~~meet Management’s expectations. A complete sellout, estimated at $25.6 million,~~the Partnership for the sale of these units from 2014 through 2019 is ~~anticipated~~approximately $7,168,000.

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 ~~occur by~~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 an applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was subsequently extended until October 31, 2020. Management is currently working with the lender on a three year ~~end 2018.~~ extension for the credit line. The costs associated with the line of credit extension were approximately $128,000. As of June 30, 2020, the credit line had an outstanding balance of $17,000,000.

~~As outlined~~On March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the ~~most recent distribution announcement~~principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the Note is due and payable on March 31, 2035. The Note is secured by a mortgage on the Brookside apartment complex located at 5-12 Totman Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with the remaining portion of the proceeds were added to cash reserves. In connection with this refinancing, there were closing costs of approximately $132,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price,

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the Partnership allocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the value of tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street entered into a Loan Agreement with Insurance Strategy Funding Corp. LLC providing for a loan in ~~October~~the maximum principal amount of ~~2017,~~$35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.50% with respect to any subsequent advance. The principal amount of the Note is due and payable on January 1, 2035. The Note is secured by a mortgage on the Property and is guaranteed by the Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

In May, 2019, the Partnership refinanced the Residences at Captain Parker. The prior mortgage of $20,071,000 had, at that time, a variable interest rate of 4.5%, which matured in February 2026, and had interest only payments until March 2021, with a thirty year amortization schedule thereafter. The new mortgage is for $20,750,000, with a fixed rate of 4.05%, maturing in 10 years, with interest only payments for the term of the loan. In connection with the refinancing, the partnership incurred a prepayment penalty of approximately $202,000.

From the start of the Stock Repurchase Program in 2007 through June 30, 2020, the Partnership has purchased 1,428,437 Depositary Receipts. During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 0.6 Class B Units and 0.03 General Partnership units at a cost of $775 and $41 respectively. In January 2019, the Partnership purchased 40,000 Depository Receipts from the former president of the management company. In March of 2020, the Board of Advisors ~~has approved a regular distribution~~and Board of ~~$9.00 per unit ($0.30 per receipt). Additionally, it~~Directors unanimously approved ~~a special distribution of $28.20 per unit ($0.94 per receipt). The purpose~~an extension of the ~~special distribution is to provide a return to~~Repurchase Program until March 31, 2025. Given the ~~Partners given~~economic uncertainty caused by the ~~expected substantial taxable income~~coronavirus issue, as of April 15, 2020, the Partnership ~~will be experiencing through 2017. Without~~has elected to temporarily suspend the ~~special distribution, Management estimated that the quarterly distributions may have covered only the tax liability to the Partners and therefore yield only a negligible return after taxes.~~repurchase program.

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The Stock Repurchase Program that was initiated in 2007 has purchased 1,365,306 Depositary Receipts through September 30, 2017 or approximately 32% of the outstanding Class A Depositary Receipts. During the third quarter, the Partnership did not purchase any Depositary Receipts. Management anticipates purchases for 2017 to be less than 2016.

At ~~November~~August 1, ~~2017,~~2020, the Estate of Harold Brown and his brother Ronald Brown ~~and the President of Hamilton, Carl Valeri,~~ collectively own approximately ~~42%~~30.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). The Estate of Harold Brown also controls 75% of the Partnership’s Class B Units, 75% of the capital stock of NewReal, Inc. (“NewReal”), the Partnership’s sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of NewReal’s capital stock. In addition, Ronald Brown is the President and director of NewReal and ~~Harold~~Jameson Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by the Estate of Harold Brown, are owned by HBC Holdings LLC, an entity of which heJameson Brown is the manager.

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. Additionally, from time to time, the Partnership pays Hamilton for repairs and maintenance services, legal services, construction services and accounting services. The costs charged by Hamilton for these services are at the same hourly rate charged to all entities managed by Hamilton, and management believes such rates are competitive in the marketplace.

Residential tenants sign a one year lease. During the ~~nine~~six months ended ~~September~~ June 30, ~~2017,~~2020, tenant renewals were approximately ~~60%~~74% with an average rental increase of approximately ~~4.1%~~3.7%, new leases accounted for approximately ~~40%~~26% with rental rate increases of approximately ~~2.9~~0.1 %. During the ~~nine~~three months ended ~~September~~ June 30, ~~2017,~~2020, leasing commissions were approximately ~~279,000~~$159,000 compared to approximately ~~$328,000~~$217,000 for the ~~nine~~six months ended ~~September~~ June 30 ~~2016,~~, 2019, a decrease of approximately ~~$49,000 (14.9%~~$58,000 (26.7%) ~~from 2016.~~. Tenant concessions were approximately ~~$32,000~~$18,000 for the ~~nine~~six months ended ~~September~~ June 30 ~~2017,~~, 2020, compared to approximately ~~$43,000~~$33,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~ 2019, a decrease of approximately ~~$11,000 (25.6%~~$15,000 (45.5%). Tenant improvements were approximately ~~$1,953,000~~$897,000 for the ~~nine~~six months ended ~~September~~ June 30 ~~2017,~~, 2020, compared toapproximately ~~$1,603,000~~$1,283,000 for the ~~nine~~six months ended ~~September~~ June 30 ~~2016, an increase~~, 2019, a decrease of approximately ~~$350,000 (21.8%~~$386,000 (30.1%).

Hamilton accounted for approximately ~~3.2%~~2.5% of the repair and maintenance expenses paid for by the Partnership during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~4.6~~5.0 % during the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2019. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance

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department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters. Several of the larger Partnership properties have their own maintenance staff. Those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton’s headquarters in Allston, Massachusetts are generally serviced by local, independent companies.

Hamilton’s legal department handles most of the Partnership’s eviction and collection matters. Additionally, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately ~~$178,000 (81.9%~~$64,000 (65.9%) and approximately ~~$167,000 (86.1%~~$100,000 (80.5%) of the legal services paid for by the Partnership during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019 respectively.

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

The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton’s architectural department also provides services to the Partnership on an as-needed basis. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, Hamilton provided the Partnership approximately ~~$137,000~~$305,000 in construction and architectural services, compared to approximately ~~$158,000~~$189,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2019.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, Hamilton charged the Partnership ~~$93,750~~$62,500 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America, requires the Partnership to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Partnership regularly and continually evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties and its investments in and advances to joint ventures. The Partnership bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. The Partnership’s critical accounting policies are those which require assumptions to be made about such matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances. See Note 1 to the Consolidated Financial Statements, Principles of Consolidation.

Revenue Recognition: Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. ~~Concessions made on residential~~Revenue from commercial leases also include reimbursements and recoveries received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease amounts are accounted for as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental

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revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. We elected the allowable practical expedients as permitted under the transition guidance, which allowed us to not reassess whether arrangements contain leases, lease classification, and initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. The adoption of this standard does not have a material impact to the Partnership’s financial statements.

RentalPropertyHeld for Sale: When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. The Partnership generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale. 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.

Rental Properties: Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of

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replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

Intangible assets acquired include amounts for in-place lease values above and below market leases and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

~~Impairment:~~Impairment 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. To the extent impairment has occurred, the loss shall be measured as the excess of the

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carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. ~~The Partnership has not recognized an impairment loss during the first nine months of 2017.~~

Investments in Joint Ventures:The Partnership accounts for its 40%~~‑50%~~-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Joint Ventures, and subsequently adjusted for the Partnership’s share in earnings, cash contributions and distributions. Under the equity method of accounting, our net equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits.

With respect to investments in and advances to the Investment Properties, the Partnership looks to the underlying properties to assess performance and the recoverability of carrying amounts for those investments in a manner similar to direct investments in real estate properties. An impairment charge is recorded if management’s

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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.

Legal Proceedings: The Partnership is subject to various legal proceedings and claims that arise, from time to time, in the ordinary course of business. These matters are frequently covered by insurance. If it is determined that a loss is likely to occur, the estimated amount of the loss is recorded in the financial statements. Both the amount of the loss and the point at which its occurrence is considered likely can be difficult to determine.

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RESULTS OF OPERATIONS

Three Months Ended ~~September~~June 30, ~~2017~~2020 and ~~September~~June 30, ~~2016~~2019

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, ~~gain on sale of real estate and~~ other ~~income and~~ expense of approximately ~~$2,928,000~~$4,444,000 during the three months ended ~~September~~June 30, ~~2017,~~2020, compared to approximately ~~$3,098,000~~$4,579,000 for the three months ended ~~September~~June 30, ~~2016,~~2019, a decrease of approximately ~~$170,000 (5.5%~~$135,000 (2.9%).

The rental activity is summarized as follows:


	Occupancy Date
	November 1, 2017		November 1, 2016

					Occupancy Date
					August 1, 2020		August 1, 2019
Residential
Units	2,651		2,525		2,911		2,730
Vacancies	68		61		182		87
Vacancy rate	2.6	%	2.4	%	6.3	%	3.2	%
Commercial
Total square feet	108,043		108,043		108,043		108,043
Vacancy	—		1,950		4,232		938
Vacancy rate	0.0	%	1.8	%	3.9	%	0.9	%


	Rental Income (in thousands)
	Three Months Ended September 30,
	2017						2016
	Total			Continuing			Total			Continuing
	Operations			Operations			Operations			Operations

													Rental Income (in thousands)
													Three Months Ended June 30,
													2020						2019
													Total			Continuing			Total			Continuing
													Operations			Operations			Operations			Operations
Total rents	$	13,322		$	13,322		$	12,274		$	12,274		$	15,647		$	15,647		$	14,886		$	14,886
Residential percentage		93	%		93	%		93	%		93	%		95	%		95	%		94	%		94	%
Commercial percentage		7	%		7	%		7	%		7	%		5	%		5	%		6	%		6	%
Contingent rentals	$	176		$	176		$	171		$	171		$	251		$	251		$	277		$	277

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Three Months Ended ~~September~~June 30, ~~2017~~2020 Compared to Three Months Ended ~~September~~June 30, ~~2016:~~2019:


	Three Months Ended September 30,				Dollar		Percent
	2017		2016		Change		Change

									Three Months Ended June 30,				Dollar		Percent
									2020		2019		Change		Change
Revenues
Rental income	$	13,321,770	$	12,273,589	$	1,048,181	8.5	%	$	15,646,814	$	14,886,423	$	760,391	5.1%
Laundry and sundry income		100,035		98,292		1,743	1.8	%		112,292		104,980		7,312	7.0%
		13,421,805		12,371,881		1,049,924	8.5	%
										15,759,106		14,991,403		767,703	5.1%
Expenses
Administrative		525,125		524,293		832	0.2	%		512,195		626,180		(113,985)	(18.2%)
Depreciation and amortization		3,664,997		3,079,368		585,629	19.0	%		4,601,617		3,590,240		1,011,377	28.2%
Management fee		544,399		511,730		32,669	6.4	%		615,541		597,197		18,344	3.1%
Operating		1,051,910		995,787		56,123	5.6	%		1,291,781		1,125,813		165,968	14.7%
Renting		301,423		301,696		(273)	(0.1)	%		128,608		242,515		(113,907)	(47.0%)
Repairs and maintenance		2,678,780		2,364,364		314,416	13.3	%		2,049,174		2,287,313		(238,139)	(10.4%)
Taxes and insurance		1,727,218		1,496,807		230,411	15.4	%		2,115,721		1,942,998		172,723	8.9%
		10,493,852		9,274,045		1,219,807	13.2	%
										11,314,637		10,412,256		902,381	8.7%
Income Before Other Income (Expense)		2,927,953		3,097,836		(169,883)	(5.5)	%		4,444,469		4,579,147		(134,678)	(2.9%)
Other Income (Expense)
Interest income		416		305		111	36.4	%		52		90		(38)	(42.2%)
Interest expense		(3,046,818)		(2,553,771)		(493,047)	19.3	%		(3,423,583)		(3,133,439)		(290,144)	9.3%
Income from investments in unconsolidated joint ventures		990,169		562,584		427,585	76.0	%
Gain on sale of real estate		—		103,793		(103,793)	(100.0)	%
		(2,056,233)		(1,887,089)		(169,144)	9.0	%
Income (Loss) from investments in unconsolidated joint ventures										444,113		513,406		(69,293)	(13.5%)
Other expense										—		(194,960)		194,960	—
										(2,979,418)		(2,814,903)		(164,515)	5.8%
Net Income	$	871,720	$	1,210,747	$	(339,027)	(28.0)	%	$	1,465,051	$	1,764,244	$	(299,193)	(17.0%)

Rental income for the three months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$13,322,000,~~$15,646,000, compared to approximately ~~$12,274,000~~$14,886,000 for the three months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$1,048,000 (8.5%~~$760,000 (5.1%). The factors that can be attributed to this increase are as follows: the acquisition of ~~Woodland Park~~Mill Street resulted in an increase in rental income of approximately ~~$617,000.~~$976,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include ~~1144 Commonwealth Avenue,~~Redwood Hills, Hamilton Oaks, ~~Westgate Apartments, School Street, Hamilton Green, River Drive Apartments,~~Westside Colonial, Brookside Associates, Olde English Village, and ~~Westside Colonial,~~1144 Commonwealth, with increases of approximately ~~$70,000, $64,000, $56,000, $41,000, $36,000, $24,000~~$46,000, $42,000, $28,000, $23,000, $23,000, and ~~$22,000~~$21,000, 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~~June 30, ~~2017~~2020 were approximately ~~$10,494,000~~$11,314,000 compared to approximately ~~$9,274,000~~$10,412,000 for the three months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$1,220,000 (13.2%~~$902,000 (8.7%). Excluding the increase in ~~operating~~ expenses ~~attributable to the acquisition of Woodland Park~~at Mill Street of approximately ~~$875,000, operating~~$1,346,000, Operating expenses ~~increased~~decreased approximately ~~$345,000 (3.9%~~$444,000 (4.3%)~~. The~~.The factors contributing to ~~this net increase~~the decrease are ~~an increase~~a decrease in repairs and maintenance expenses of approximately $300,000 (13.1%), a decrease in administrative expenses of approximately $ 131,000, (20.9%), and a decrease in renting expenses of approximately $122,000, (50.3%), partially offset by an increase in operating costs of approximately ~~$ 219,000 (9.3%~~$90,000 (8.0%), ~~and an increase in taxes and insurance of approximately $162,000 (10.8%).~~

Interest expense for the three months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$3,047,000~~$3,423,000 compared to approximately ~~$2,554,000~~$3,133,000 for the three months ended ~~September~~ June 30, ~~2016,~~2019, an increase of approximately ~~$493,000 (19.3%~~$290,000 (9.3%). Excluding the increase in interest expense attributable to ~~Woodland Park~~Mill Street of approximately ~~$477,000,~~$281,000, there was an increase in interest expense of approximately ~~$16,000.~~

$8,000.

At ~~September~~June 30, ~~2017,~~2020, the Partnership has between a 40% and 50% ownership interests in ~~nine~~seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

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As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately ~~$990,000~~$444,000 for the three months ended ~~September~~June 30, ~~2017,~~2020, compared to net income of approximately ~~$562,000~~$513,000 for the three months ended ~~September~~June 30, ~~2016, an increase~~2019, a decrease in income of approximately ~~$428,000 (76.0%~~$69,000 (13.5%). This ~~increase~~decrease is primarily due to athe reduction in the gain realized from the sales of condominium units of approximately $305,000 with the Partnership’s share amounting to 50%, on the sale of ~~real estate of approximately $1,866,000 on the sale of 8 units at Hamilton Bay Apartments LLC, 7~~2 units at Hamilton 1025 ~~LLC, and 1 unit at Hamilton Bay LLC, compared to a gain of approximately $902,000 for the sale of 6 units at Hamilton 1025 LLC and 1 unit at Hamilton Bay~~Apartments LLC for the ~~three months~~quarter ended ~~September~~June 30, ~~2016.~~2019, compared to no units sold in the quarter ended June 30, 2020. Included in the income for the three months ended ~~September~~June 30, ~~2017~~2020 is depreciation and amortization expense of approximately ~~$696,000.~~$650,000. The proportional income for the three months ended ~~September~~June 30, ~~2017~~2020 from the investment in Dexter Park is approximately ~~$90,000.~~$283,000.

As a result of the changes discussed above, net income for the three months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$872,000~~$1,465,000 compared to income of approximately ~~$1,211,000~~$1,764,000 for the three months ended ~~September~~June 30, ~~2016,~~2019, a decrease in income of approximately ~~$339,000 (28.0~~$299,000 (17.0 %).

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~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2020 Compared to ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016:~~2019:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other ~~income and~~ expense of approximately ~~$10,640,000~~$8,789,000 during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, compared to approximately ~~$9,747,000~~$8,531,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$893,000 (9.2 %)~~$258,000 (3.0%).


	Six Months Ended June 30,				Dollar		Percent
	2020		2019		Change		Change
Revenues
Rental income	$	31,900,244	$	29,654,899	$	2,245,345	7.6%
Laundry and sundry income		234,446		218,649		15,797	7.2%
		32,134,690		29,873,548		2,261,142	7.6%
Expenses
Administrative		1,096,853		1,238,938		(142,085)	(11.5%)
Depreciation and amortization		9,167,084		7,272,918		1,894,166	26.0%
Management fee		1,264,534		1,187,806		76,728	6.5%
Operating		2,960,183		3,009,831		(49,648)	(1.6%)
Renting		325,479		424,573		(99,094)	(23.3%)
Repairs and maintenance		4,135,392		4,231,544		(96,152)	(2.3%)
Taxes and insurance		4,396,262		3,977,104		419,158	10.5%
		23,345,787		21,342,714		2,003,073	9.4%
Income Before Other Income ( Expense)		8,788,903		8,530,834		258,069	3.0%
Other Income (Expense)
Interest income		159		269		(110)	(40.9%)
Interest (expense)		(6,873,908)		(6,133,728)		(740,180)	12.1%
Income from investments in unconsolidated joint ventures		918,680		1,062,345		(143,665)	(13.5%)
Other expense		—		(194,960)		194,960	—
		(5,955,069)		(5,266,074)		(688,995)	13.1%
Net Income	$	2,833,834	$	3,264,760	$	(430,926)	(13.2%)

Nine Months Ended September 30,

Dollar

Percent


2017

2016

Change

Change

Revenues

Rental income

$
38,636,732

$
36,482,801

$
2,153,931

5.9
%
Laundry and sundry income

316,471

326,633

(10,162)

(3.1)
%

38,953,203

36,809,434

2,143,769

5.8
%
Expenses

Administrative

1,513,869

1,477,708

36,161

2.4
%
Depreciation and amortization

9,647,751

9,167,516

480,235

5.2
%
Management fee

1,599,647

1,513,226

86,421

5.7
%
Operating

3,797,935

3,489,724

308,211

8.8
%
Renting

482,157

544,923

(62,766)

(11.5)
%
Repairs and maintenance

6,187,673

6,185,250

2,423

0.0
%
Taxes and insurance

5,083,674

4,684,062

399,612

8.5
%

28,312,706

27,062,409

1,250,297

4.6
%
Income Before Other Income (Expense)

10,640,497

9,747,025

893,472

9.2
%
Other Income (Expense)

Interest income

1,132

710

422

59.4
%
Interest (expense)

(8,113,197)

(7,650,096)

(463,101)

6.1
%
Income  from investments in unconsolidated joint ventures

2,721,231

1,220,666

1,500,565

122.9
%
Gain on sale of real estate

—

103,793

(103,793)

(100.0)
%

(5,390,834)

(6,324,927)

934,093

(14.8)
%
Net Income

$
5,249,663

$
3,422,098

$
1,827,565

53.4
%

Rental income for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$38,637,000,~~$31,900,000, compared to approximately ~~$36,483,000~~$29,655,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$2,154,000 (5 .9 %)~~$2,245,000 (7.6%). The factors that ~~contribute~~can be attributed to this increase ~~can be attributed~~are as follows: the acquisition of ~~Woodland Park~~Mill Street resulted in an increase ofin rental income of approximately ~~$617,000.~~$1,949,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income ~~include: Westgate Apartments,~~include, Hamilton Oaks, 62 Boylston, Westside Colonial, Redwood Hills, 1144 Commonwealth Avenue, ~~Hamilton Oaks, School Street , Westside Colonial, Hamilton Green,~~ and ~~Captain Parker,~~Woodland Park, with increases of approximately ~~$259,000, $226,000, $157,000, $138,000, $98,000, $96,000~~$104,000, $89,000, $80,000, $77,000, $70,000, and ~~$92,000~~$49,000 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.

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Operating expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 were approximately ~~$28,312,000~~$23,345,000 compared to approximately ~~$27,062,000~~$21,342,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$1,250,000, (4.6%~~$2,003,000 (9.4%). Excluding the increase in operating expenses attributable to the acquisition of Mill Street of approximately ~~$875,000 due to the purchase of Woodland Park,~~$2,692,000, operating expenses ~~increased~~decreased approximately ~~$375,000 (1.5%~~$689,000 (3.2%). The factors contributing to this net ~~increase~~decrease are a decrease in depreciation and amortization of approximately $ 219,000 (3.0%) due to fully depreciated assets, a decrease in repairs and maintenance expenses of approximately $218,000 (5.1%), a decrease in operating costs of approximately $215,000 (7.2%), partially offset by an increase in taxes and insurance of approximately ~~$331,000 (7.1%~~$246,000 (6.2%), due to an increase in real estate taxes, an increase in operating costs of approximately $266,000 (7.6%), due to an increase in utility costs and snow removal, partially offset by a decrease in depreciation and amortization expense of approximately $124,000 (1.0%),and a decrease in repairs and maintenance costs of approximately $93,000 (1.5 %).

~~Table of Contents~~

Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$8,113,000~~$6,874,000 compared to approximately ~~$7,650,000~~$6,134,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2019, an increase of approximately ~~$463,000 (6.1%~~$740,000 (12.1%). Excluding the increase in interest expense attributable to ~~Woodland Park~~Mill Street of approximately ~~$477,000,~~$563,000, there was an increase in interest expense of approximately $177,000, primarily due to an increase in interest expense on the line of credit of approximately $399,000, partially offset by a decrease in interest expense for Captain Parker of approximately ~~$14,000.~~ $144,000.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately ~~$2,721,000~~$919,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, compared to net income of approximately ~~$1,221,000~~$1,062,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase~~2019, a decrease in income of approximately ~~$1,500,000 (122.9%~~$144,000 (13.5%). This ~~increase~~decrease is primarily due to athe reduction in the gain realized from the sales of condominium units of approximately $739,000 with the Partnership’s share amounting to 50%, on the sale of ~~real estate of approximately $4,236,000 on the sale of 18~~3 units at Hamilton Bay Apartments LLC, 15and the sale of 2 units at Hamilton 1025 ~~LLC, and 1 unit at Hamilton Bay LLC, compared to a gain of approximately $1,137,000 on the sale of 6 units at Hamilton 1025 and 4 units at Hamilton Bay~~Apartments LLC for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2019, compared to no units sold in the quarter ended June 30, 2020. Included in the income for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 is depreciation and amortization expense of approximately ~~$2,024,000.~~$1,297,000. The ~~allocable~~proportional income for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 from the investment in Dexter Park is approximately ~~$552,000.~~$572,000.

As a result of the changes discussed above, net income for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was approximately ~~$5,250,000~~$2,834,000 compared to income of approximately ~~$3,422,000~~$3,265,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2019, an increase in net income of approximately ~~$1,828,000 (53.4~~$431,000 (13.2 %).

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LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first ~~nine~~six months of ~~2017~~2020 was the collection of rents and the proceeds from the ~~mortgage for Woodland Park.~~refinancing of Brookside Apartments. The Partnership’s principal source of cash in ~~2016~~2019 was the collection of ~~rents and the proceeds from the mortgage for Captain Parker.~~rents. The majority of cash and cash equivalents of ~~$14,913,412~~$15,396,023 at ~~September~~June 30, ~~2017~~2020 and ~~$7,463,697~~$7,546,324 at December 31, ~~2016~~2019 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of ~~$7,449,715~~$7,849,699 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 is summarized as follows:


	Nine Months Ended September 30,
	2017		2016

					Six Months Ended June 30,
					2020		2019
Cash provided by operating activities	$	12,027,538	$	10,162,558	$	9,524,873	$	11,911,247
Cash (used in) investing activities		(46,941,642)		(2,529,066)		(454,059)		(137,987)
Cash provided by (used in) financing activities		45,765,015		(6,552,939)		1,510,950		(2,584,183)
Repurchase of Depositary Receipts, Class B and General Partner Units		(42,548)		(694,380)		(394,031)		(3,305,651)
Distributions paid		(3,358,648)		(2,810,776)		(2,338,034)		(2,352,443)
Net increase (decrease) in cash and cash equivalents	$	7,449,715	$	(2,424,603)
Net increase in cash and cash equivalents					$	7,849,699	$	3,530,983

The ~~increase~~change in cash provided by operating activities is ~~primarily~~ due to ~~an increase~~various factors, including a change in ~~rent collections~~depreciation expense due to recent acquisitions, a change in income and ~~a decrease in cash operating expenses.~~distribution from joint ventures, and other factors. The decrease in cash ~~used in~~provided by investing activities is primarily due to improvements to rental properties. The change in

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cash used in financing activities is primarily due to the refinancing of the mortgage at Brookside Apartments, partially offset by paydown of mortgages, and the pay down of the line of credit originally used for the purchase of Woodland Park Apartments and the Partnership contributing $2,222,000 to pay off the principal of the mortgage on Hamilton Bay Apartments. The change in cash provided by financing activities is due to the proceeds of the loan for Woodland Park Apartments. Mill Street.

During the nine months ended September 30, 2017, the Partnership purchased 549 Depositary Receipts for an average price of $62.00 for a total cost of $34,038; 4.3 Class B Units for a cost of $8,084 and 0.2 General Partnership Units for a cost of $426, for a total cost of $42,548.

~~During 2017,~~2020, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately ~~$4,006,000.~~$1,504,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at ~~1144 Commonwealth,~~ 62 Boylston Street, ~~School Street Associates, Westside Colonial,~~Captain Parker, Hamilton Oaks, ~~and~~ Redwood Hills, Hamilton Green, and Hamilton Highland at a cost of approximately ~~$872,000, $559,000, $462,000, $389,000, $327,000~~$341,000, $279,000, $224,000, $106,000, $99,000 and ~~$292,000~~$66,000 respectively. ~~The Partnership plans to invest approximately $1,000,000 in additional capital improvements in 2017.~~

On ~~July 6, 2017, Woodland Park Partners,~~March 31, 2020, Nera Brookside Associates, LLC (“Brookside Apartments”), entered into a ~~newly formed subsidiary~~Mortgage Note with KeyBank National Associates ( KeyBank) in the principal amount of $6,175,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.53% per annum, and the principal amount of the ~~Partnership, purchased~~Note is due and payable on March 31, 2035. The Note is secured by a mortgage on the ~~Woodland Park Apartments, a 126-unit~~Brookside apartment complex located at ~~264-290 Grove Street, Newton,~~5-12 Totman Drive, Woburn, Massachusetts ~~(the “Property”), for~~pursuant to a ~~purchase price~~Mortgage, Assignment of ~~$45,600,000.~~

~~To fund the purchase price, the Partnership borrowed $25,000,000 under its outstanding line of credit with KeyBank, NA,~~Leases and $16,000,000 from HBC Holdings, LLC, a Massachusetts limited liability company controlled by Harold Brown. The loan from HBC Holdings will mature on July 16, 2018, with interest only at 4.75%. The balance of the purchase price was funded by the Partnership’s cash reserves. The Partnership paid off the loan of HBC Holdings on September 29, 2017, and the total interest paid on the loan was approximately $182,000.

~~On September 29, 2017, Woodland Park Partners LLC, ( “Woodland Park”), entered into a Multifamily Loan~~Rents and Security Agreement ~~(the “Loan Agreement”)~~dated March 31, 2020. The Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside Apartments used the proceeds of the loan to pay off an outstanding loan of approximately $2,390,000, with ~~KeyBank National Association (the “Lender”). The manager~~the remaining portion of ~~Woodland Park is NewReal, Inc. (“New Real”),~~ the ~~general partner~~proceeds added to cash reserves. In connection with this refinancing, there were closing costs of approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC, collectively referred to as Mill Street, wholly-owned subsidiaries of New England Realty Associates Limited Partnership ~~(the “Partnership”)~~closed on a Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty Limited Partnership pursuant to which Mill Street acquired Country Club Garden Apartments, a 181 unit apartment complex located at 57 Mill Street, Woburn, Massachusetts for an aggregate purchase price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out of an existing line of credit, $10,550,000 of the cash portion of the purchase price out of cash reserves and the remaining $31,000,000 from the proceeds of the Loan. The closing costs were approximately $237,000. From the purchase price, the Partnership isallocated approximately $1,282,000 for in- place leases, and approximately $136,000 to the ~~sole member~~value of ~~Woodland Park. The~~tenant relationships. These amounts are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street Gardens entered into a Loan Agreement ~~provides~~with Insurance Strategy Funding Corp. LLC providing for a ~~term~~ loan (the “Loan”) in the maximum principal amount of ~~$22,250,000.~~$35,000,000, consisting of an initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain conditions are met. Interest on the Note is payable on a monthly basis at a fixed interest rate of: (i) 3.586% per annum with respect to the initial advance and (ii) the greater of (A) the sum of the market spread rate and the interpolated (based on the remaining term of the Loan) US Treasury rate at the time of the advance and (B) 3.500% with respect to any subsequent advance. The ~~Loan~~principal amount of the Note is due and payable on ~~October~~January 1, ~~2027 (the “Due Date”), unless~~2035. The Note is secured by a mortgage on the ~~due date~~Property and is ~~accelerated in accordance with~~guaranteed by the ~~Loan’s terms, with interest only through October 1, 2022. Borrowings under the Loan will bear interest at the rate of 3.79%.~~Partnership pursuant to a Guaranty Agreement dated December 20, 2019.

On ~~January 7, 2016,~~May 31, 2019, Residences at Captain Parker, LLC (“Captain Parker”), entered into a ~~Multifamily Loan~~Mortgage Note with Strategy Funding Corp., LLC in the principal amount of $20,750,000. Interest only payments on the Note is payable on a monthly basis at a fixed interest rate of 4.05% per annum, and the principal amount of the Note is due and payable on June 1, 2029. The Note is secured by a mortgage on the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane, Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement ~~(the “Loan Agreement”) with KeyBank National Association (the “Lender”).~~dated May 31, 2019. The ~~manager of~~Note is guaranteed by the Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker ~~is NewReal, Inc. (“New Real”),~~used the general partner of New England Realty Associates Limited Partnership (the “Partnership”). The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”) in the

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~~principal amount of $20,071,000. The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms. The~~ proceeds of the ~~Loan were used~~loan to ~~refinance existing indebtedness. The Partnership is~~pay off an outstanding loan of approximately $20,071,000. In connection with this refinancing, the property incurred a ~~limited guarantor~~prepayment penalty of ~~certain of the Captain Parker obligations under the Loan Agreement.~~approximately $202,000.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 the Partnership received distributions of approximately ~~$5,370,000~~$1,066,000 from the investment properties. For the ~~nine~~six months ended, ~~September~~June 30, ~~2016,~~2019, the Partnership received distributions of approximately ~~$2,707,000~~$2,348,000 from the investment properties. Included in these net distributions is the amount from Dexter Park of approximately ~~$1,160,000~~$700,000 and ~~$740,000~~$1,168,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019, respectively. In January 2020, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2020. In April 2020, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on June 30, 2020.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line iswas for three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b)

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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 costs associated with the line of credit were approximately $125,000. As of September 30, 2017, the credit line had an outstanding balance of $25,000,000, used in connection with the purchase of Woodland Park Apartments. The Line of Credit was paid down by $8,000,000 on October 5, 2017.

As of September 30, 2017, the credit line had an outstanding balance of $25,000,000, which was used on July 6, 2017, in conjunction with a loan of $16,000,000 from HBC Holdings, LLC, a Massachusetts Limited Liability company controlled by Harold Brown, and cash reserves, to purchase Woodland Park Partners, LLC (“Woodland Park”).The loan from HBC was paid off on September 29, 2017 from the proceeds of the loan from Keybank.

~~The Line of Credit was paid down by $8,000,000 on October 5, 2017. The Line of Credit~~ agreement originally expired on July 31, 2017, and ~~has been subsequently~~was extended ~~through an amendment to the agreement~~ until October 31, 2020. The ~~cost~~costs associated with the line of credit extension ~~will be~~were approximately ~~$125,000.~~$128,000.

On December 19, 2019, the Partnership drew down on the line of credit in the amount of $20,000,000, used in conjunction with the purchase of Mill Street Apartments. On December 20, 2019, the Partnership paid down $2,000,000. On January 22, 2020, the Partnership paid down the line by $1,000,000. As of June 30, 2020, the line of credit had an outstanding balance of $17,000,000.

The Partnership anticipates that cash from operations and interest bearing accounts will be sufficient to fund its current operations, pay distributions, make required debt payments and finance current improvements to its properties. The Partnership may also sell or refinance properties. The Partnership’s net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, increases or decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of ~~September~~June 30, ~~2017,~~2020 the Partnership had a 40%-50% ownership interest in ~~nine~~seven Joint Ventures, ~~all~~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~~June 30, ~~2017,~~2020, our proportionate share of the non-recourse debt related to these investments was approximately ~~$54,300,000.~~$71,076,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

As of ~~September~~June 30, ~~2017,~~2020, we are subject to contractual payment obligations as described in the table below.


				Payments due by period

		2018		2019		2020		2021		2022		Thereafter		Total

																		Payments due by period

															2021		2022		2023		2024		2025		Thereafter		Total

Contractual Obligations


Long -term debt
Mortgage debt *	$	1,823,118	$	7,902,953	$	4,324,373	$	2,312,085	$	2,560,822	$	216,152,103	$	235,075,454	$	2,357,013	$	2,541,650	$	79,930,355	$	25,419,180	$	11,027,464	$	164,591,469	$	285,867,131

Line of Credit		—		—		17,000,000		—		—		—		17,000,000

Other obligations																17,000,000		—		—		—		—		—		17,000,000
Total Contractual Obligations	$	1,823,118	$	7,902,953	$	21,324,373	$	2,312,085	$	2,560,822	$	216,152,103	$	252,075,454	$	19,357,013	$	2,541,650	$	79,930,355	$	25,419,180	$	11,027,464	$	164,591,469	$	302,867,131

* Excluding unamortized deferred financing costs

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We have various standing or renewable service contracts with vendors related to our property management. In addition, we have certain other contracts we enter into in the ordinary course of business that may extend beyond one year. These contracts are not included as part of our contractual obligations because they include terms that provide for cancellation with insignificant or no cancellation penalties.

See Notes 5 and 14 to the Consolidated Financial Statements for a description of mortgage notes payable. The Partnerships has no other material contractual obligations to be disclosed.

Factors That May Affect Future Results

Along with risks detailed in Item 1A and from time to time in the Partnership’s filings with the Securities and Exchange Commission, some factors that could cause the Partnership’s actual results, performance or achievements to differ materially from those expressed or implied by forward looking statements include but are not limited to the following:

●

The Partnership depends on the real estate markets where its properties are located, primarily in Eastern Massachusetts, and these markets may be adversely affected by local economic market conditions, which are beyond the Partnership’s control.

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●

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

●

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

●

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

●

The Partnership is subject to increases in heating and utility costs that may arise as a result of economic and market conditions and fluctuations in seasonal weather conditions.

●

Civil disturbances, earthquakes and other natural disasters may result in uninsured or underinsured losses.

●

Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our properties.

●

Financing or refinancing of Partnership properties may not be available to the extent necessary or desirable, or may not be available on favorable terms.

●

The Partnership properties face competition from similar properties in the same market. This competition may affect the Partnership’s ability to attract and retain tenants and may reduce the rents that can be charged.

●

Given the nature of the real estate business, the Partnership is subject to potential environmental liabilities. These include environmental contamination in the soil at the Partnership’s or neighboring real estate, whether caused by the Partnership, previous owners of the subject property or neighbors of the subject property, and the presence of hazardous materials in the Partnership’s buildings, such as asbestos, lead, mold and radon gas. Management is not aware of any material environmental liabilities at this time.

●

Insurance coverage for and relating to commercial properties is increasingly costly and difficult to obtain. In addition, insurance carriers have excluded certain specific items from standard insurance policies, which

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have resulted in increased risk exposure for the Partnership. These include insurance coverage for acts of terrorism and war, and coverage for mold and other environmental conditions. Coverage for these items is either unavailable or prohibitively expensive.

●

Market interest rates could adversely affect market prices for Class A Partnership Units and Depositary Receipts as well as performance and cash flow.

●

Changes in income tax laws and regulations may affect the income taxable to owners of the Partnership. These changes may affect the after-tax value of future distributions.

●

The Partnership may fail to identify, acquire, construct or develop additional properties; may develop or acquire properties that do not produce a desired or expected yield on invested capital; may be unable to sell poorly- performing or otherwise undesirable properties quickly; or may fail to effectively integrate acquisitions of properties or portfolios of properties.

●

Risk associated with the use of debt to fund acquisitions and developments.

●

Competition for acquisitions may result in increased prices for properties.

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●

Any weakness identified in the Partnership’s internal controls as part of the evaluation being undertaken could have an adverse effect on the Partnership’s business.

●

Ongoing compliance with Sarbanes-Oxley Act of 2002 may require additional personnel or systems changes.

The foregoing factors should not be construed as exhaustive or as an admission regarding the adequacy of disclosures made by the Partnership prior to the date hereof or the effectiveness of said Act. The Partnership expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates and equity prices. In pursuing its business plan, the primary market risk to which the Partnership is exposed is interest rate risk. Changes in the general level of interest rates prevailing in the financial markets may affect the spread between the Partnership’s yield on invested assets and cost of funds and, in turn, its ability to make distributions or payments to its investors.

As of ~~September~~June 30, ~~2017,~~2020, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately ~~$360,154,000~~$453,020,000 in long-term debt, substantially all of which require payment of interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. This long term debt matures through ~~2029.~~2035. The Partnership, its Subsidiary Partnerships and the Investment Properties collectively have variable rate debt of ~~$30,071,000~~$27,000,000 (without taking out unamortized deferred financing costs) as of ~~September~~June 30, ~~2017~~2020. Interest rates ranged from LIBOR plus ~~201~~195 basis points to LIBOR plus 350 basis points. Assuming ~~interest- rate~~interest-rate caps are not in effect, if market rates of interest on the Partnership’s variable rate debt increased or decreased by 100 basis points, then the increase or decrease in interest costs on the Partnership’s variable rate debt would be approximately ~~$301,000~~$220,000 annually and the increase or decrease in the fair value of the Partnership’s fixed rate debt as of ~~September~~June 30, ~~2017~~2020 would be approximately ~~$17~~$20 million. For information regarding the fair value and maturity dates of these debt obligations, See Note 5 to the Consolidated Financial Statements — “Mortgage Notes Payable,” Note 12 to the Consolidated Financial Statements — “Fair Value Measurements” and Note 14 to the Consolidated Financial Statements — “Investment in Unconsolidated Joint Ventures.”

For additional disclosure about market risk, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results”.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. The Partnership’s management, with the participation of the Partnership’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Partnership’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act.

Changes in Internal Control over Financial ~~Reporting.~~Reporting. There were no changes in our internal control over financial reporting during the ~~third~~second quarter of ~~2017~~2020 that materially affected or are reasonably likely to materially affect our internal control over financial reporting. We have not experienced any material impacts to our internal control over financial reporting as a result of a majority or our office employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing our internal control environment to ensure that our controls continue to be designed effectively and continue to operate effectively throughout the duration of the pandemic.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

There are no material legal proceedings, other than ordinary routine litigation incidental to its business, to which the Partnership is a party to or to which any of the Properties is subject.

Item 1A. Risk Factors

There ~~were no~~have been a material changes to the risk factors disclosed in Part 1, Item 1A, of our annual report on Form ~~10-K~~10K for the fiscal year ended December 31, ~~2016.~~2019. The additional risk factor is as follows:

The COVID-19 pandemic has caused severe disruptions in the United States and global economies and we expect it will continue to adversely affect our financial condition, results of operations, cash flows, liquidity and performance and that of our tenants.

Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

The global impact of the COVID-19 pandemic is continually evolving and public health officials and governmental authorities, including those in Massachusetts and New Hampshire, the markets in which we operate, have reacted by taking measures such as prohibiting people from congregating in heavily populated areas, instituting quarantines, restricting travel, issuing “stay-at-home” orders, restricting the types of businesses that may continue to operate (including the types of construction projects that may proceed) and closing schools, among many others. Most of these restrictions began in earnest in March 2020 and they quickly had a material adverse impact on economic and market conditions around the world, including the United States and the markets in which our properties are located, and on us. It is possible that public health officials and governmental authorities in the markets in which we operate may impose additional restrictions in an effort to slow the spread of COVID-19 or may relax or revoke existing restrictions too quickly, which could, in either case, exacerbate the severity of these adverse impacts on the economy. There is great uncertainty regarding the duration and breadth of the COVID-19 pandemic, as well as possible future responses, which makes it impossible for us to predict with certainty the impact that COVID-19 will have on us and our tenants at this time. Factors related to COVID-19 that have had, or could have, a material adverse effect on our results of operations and financial condition, include:

●

a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action, which could adversely affect our operations and those of our tenants;

●

reduced economic activity impacting the businesses, financial condition and liquidity of our tenants has caused, and is expected to continue to cause, one or more of our tenants to be unable to meet their obligations to us, including their ability to make rental payments, in full or at all, or to otherwise seek modifications of such obligations, including rent concessions, deferrals or abatements, or to declare bankruptcy;

●

the impact of new or continued complete or partial shutdowns of the operations of one or more of our commercial tenants’ businesses, including retail tenants, and parking operators, temporary or long-term disruptions in our commercial tenants’ supply chains from local, national and international suppliers or delays in the delivery of products, services or other materials necessary for our commercial tenants’ operations, could force these tenants to reduce, delay or eliminate offerings of their products and services, which could result in less revenue, income and cash flow, and possibly their bankruptcy or insolvency, which in turn could:

reduce our cash flows,

adversely impact our ability to finance, refinance or sell a property,

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adversely impact our ability to continue paying dividends to our stockholders at current levels, or at all, and

result in additional legal and other costs to enforce our rights, collect rent and/or re-lease the space occupied by the distressed tenant;

●

the duration and scope of the mandatory business closures and “stay-at-home” orders have had, and are expected to continue to have, a severe negative impact on our commercial retail tenants that depend on in-person interactions with their customers to generate revenues and have resulted, and are expected to continue to result, in most retail tenants being unable to make timely rental payments in full or at all;

●

the extent to which COVID-19 decreases customers’ willingness to frequent, or prevents customers from frequenting, our tenants’ businesses in the future, may result in our retail tenants’ continued inability to make timely rental payments to us under their leases;

●

some of our residential and commercial tenants have approached us seeking either rent concessions, deferrals or abatements, and the extent to which we grant these requests or instead seek to enforce our legal remedies could have a material adverse effect on our results of operations, liquidity and cash flows;

●

the degree to which our commercial tenants’ businesses have been and continue to be negatively impacted may require us to write-off a tenant’s accrued rent balance and this could have a material adverse effect on our results of operations and liquidity;

●

if new or existing actions or measures implemented to prevent the spread of COVID-19 continue to result in increasing unemployment, it may negatively affect the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay rent, in full or at all, in a timely manner;

●

the impact of COVID-19 could result in an event or change in circumstances that results in an impairment in the value of our properties or our investments in unconsolidated joint ventures, and any such impairment could have a material adverse effect on our results of operations in the periods in which the charge is taken;

we may be unable to restructure or amend leases with certain of our tenants on terms favorable to us or at all;

●

the impact and validity of interpretations of lease provisions and related claims by tenants regarding their obligations to pay rent as a result of COVID-19, and any court rulings or decisions interpreting these provisions, could have a material adverse effect on our results of operations and liquidity;

●

restrictions intended to prevent the spread of COVID-19 have limited, and are expected to continue to limit, our leasing activities, such as property tours, and may have a material adverse effect on our ability to renew leases, lease vacant space or re-lease available space as leases expire in our properties on favorable terms, or at all;

●

COVID -19 has caused a material decline in general business activity and demand for real estate transactions, and if this persists, it would adversely affect our ability or desire to make strategic acquisitions or dispositions;

●

the impact of recent and future efforts by state, local, federal and industry groups to enact laws and regulations have restricted, and may further restrict, the ability of landlords, such as us, to collect rent, enforce remedies for the failure to pay rent, or otherwise enforce the terms of the lease agreements, such as a rent freeze for tenants or a suspension of a landlord’s ability to enforce evictions;

●

we may be unable to access debt and equity capital on attractive terms, or at all, and a further disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our tenants’ and our access to capital and other sources of funding necessary to fund our respective operations or address maturing liabilities on a timely basis;

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●

the financial effects of the COVID-19 pandemic on our future financial results, cash flows and financial condition could adversely impact our compliance with the financial covenants of our credit facility and other debt agreements and could result in an event of default and the acceleration of indebtedness, which could negatively impact our financial condition, results of operations and our ability to make additional borrowings and pay dividends;

●

increased vulnerability to cyber-security threats and potential breaches, including phishing attacks, malware and impersonation tactics, resulting from the increase in numbers of individuals working from home;

●

the potential that business interruption, loss of rental income and/or other associated expenses related to our operations will not be covered in whole or in part by our insurance policies, which may increase unreimbursed liabilities;

●

if the health of our employees, particularly our key personnel and property management teams, are negatively impacted, we may be unable to ensure business continuity and be exposed to lawsuits from tenants;

●

if we choose not to pay dividends, our holders of depositary receipts may have to pay income taxes on the Partnership’s income without receiving a corresponding amount of cash;

●

uncertainly as to what conditions must be satisfied before government authorities lift “stay-at-home” orders and public health officials begin the process of gradually returning Americans to work and whether government authorities will impose (or suggest) requirements on landlords, such as us, to protect the health and safety of tenants and visitors to our buildings could result in increased operating costs and demands on our property management teams to ensure compliance with any such requirements, as well as increased costs associated with protecting against potential liability arising from these measures, such as claims by tenants that the measures violate their leases and claims by visitors that the measures caused them damages; and

●

limited access to our facilities, management, tenants, support staff and professional advisors could decrease the effectiveness of our disclosure controls and procedures, internal controls over financial reporting and other risk mitigation strategies, increase our susceptibility to security breaches, hamper our ability to comply with regulatory obligations and prevent us from conducting our business as efficiently and effectively as we otherwise would have.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~(a)None~~

~~(b)None~~

~~(c)Issuer Purchase of Equity Securities during the third quarter of 2017:~~

(a)

None

(b)

None

	(c)
					~~Remaining number~~Issuer Purchase of ~~Depositary~~
				~~Depositary Receipts~~	~~Receipts that may be purchased~~
~~Period~~		~~Average Price Paid~~		~~Purchased as Part~~Equity Securities during the second quarter of ~~Publicly Announced Plan~~	~~Under the Plan (as Amended)~~

~~July 1-31, 2017~~		$	—	—	~~634,694~~
~~August 1-31, 2017~~		$	—	—	~~634,694~~
~~September 1-30, 2017~~		$	—	—	~~634,694~~
~~Total~~				—		2020:


				Remaining number of Depositary
			Depositary Receipts	Receipts that may be purchased
Period	Average Price Paid		Purchased as Part of Publicly Announced Plan	Under the Plan (as Amended)

April 1-30, 2020	$	42.95	78	571,561
May 1-31, 2020	$	—	—	571,561
June 1-30, 2020	$	—	—	571,561
Total			78

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increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. ~~The~~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 ~~Restate~~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. From August 20, 2007 through ~~September~~June 30, ~~2017,~~2020, the Partnership has repurchased ~~1,365,306~~1,428,437 Depositary Receipts at an average price of ~~$27.14~~$28.43 per receipt (or ~~$814.20~~$852.90 per underlying Class A Unit), ~~3,072~~3,572 Class B Units and ~~162~~188 General Partnership Units, both at an average price of ~~$926.26~~$1,033.00 per Unit, totaling approximately ~~$40,274,000~~$44,718,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2020, the Partnership purchased a total of 5,328 Depositary Receipts. The average price was $59.14 per receipt or $1,774.20 per unit. The total cost including commission was $315,216. The Partnership was required to repurchase 42.18 Class B Units and 2.22 General Partnership units at a cost of $74,839 and $3,939 respectively. Given the economic uncertainty caused by the coronavirus issue, as of April 15, 2020, the Partnership has elected to temporarily suspend the repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

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Item 5. Other Information

~~None.~~None

~~Item 6. Exhibits~~

Item 6. Exhibits

See the exhibit index below.

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EXHIBIT INDEX


Exhibit No.		Description of Exhibit
~~(10.1)~~		Revolving Line of Credit Agreement dated July 31, 2014 (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 6, 2014.
~~(10.2)~~		~~Assignment and Assumption Agreement dated July 6, 2017, by and between New England Realty Associates Limited Partnership and M.J. Realty Trust II.~~
~~(10.3)~~		~~Promissory Note dated July 6, 2017 in the principal amount of $16,000,000 payable to HBC Holdings, LLC, made by New England Realty Associates Limited Partnership.~~
~~(10.4)~~		~~Pledge Agreement dated July 6, 2017, by and between New England Associates Limited Partnership and HBC Holdings, LLC.~~
(31.1)		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership).
(31.2)		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of ~~Harold~~Jameson Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(32.1)		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and ~~Harold~~Jameson Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(101.1)		The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2017,~~2020, formatted in ~~XBRL:~~Inline XBRL (eX tenable Business Property Language: (i) Consolidated Balance Sheets, (unaudited) (ii) Consolidated Statements of Income, (unaudited) (iii) Consolidated Statements of Changes in Partners’ Capital, (unaudited) (iv) Consolidated Statements of Cash Flows, (unaudited) and (v) Notes to Consolidated Financial Statements, (unaudited) (filed herewith).
~~(1)~~(104)		~~Incorporated herein by reference to Exhibit 10.1 to~~Cover Page Interactive Data File – The cover page interactive data file does not appear in the ~~partnership’s Current report on Form 8-K as filed with~~Interactive Data File because its XBRL tags are embedded within the ~~securities and Exchange Commission on July 11,2017.~~
~~(2)~~		~~Incorporated herein by reference to Exhibit 10.2 to the partnership’s Current report on Form 8-K as filed with the securities and Exchange Commission on July 11,2017.~~
~~(3)~~		~~Incorporated herein by reference to Exhibit 10.3 to the partnership’s Current report on Form 8-K as filed with the securities and Exchange Commission on July 11,2017~~
~~(4)~~		~~Incorporated herein by reference to Exhibit 10.4 to the partnership’s Current report on Form 8-K as filed with the securities and Exchange Commission on July 11,2017~~ Inline XBRL document.

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Table of Contents

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
	By:	/s/ NEWREAL, INC.

		Its General Partner

	By:	/s/ RONALD BROWN
		Ronald Brown, President
	Dated: ~~November 8, 2017~~August 7, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date
/s/ RONALD BROWN	President and Director of the General Partner	~~November 8, 2017~~August 7, 2020
Ronald Brown	(Principal Executive Officer)

/s/ ~~HAROLD~~JAMESON BROWN	Treasurer and Director of the General Partner	~~November 8, 2017~~August 7, 2020
~~Harold~~Jameson Brown	(Principal Financial Officer and Principal Accounting Officer)

/s/ GUILLIAEM AERTSEN	Director of the General Partner	~~November 8, 2017~~August 7, 2020
Guilliaem Aertsen

/s/ DAVID ALOISE	Director of the General Partner	~~November 8, 2017~~August 7, 2020
David Aloise

/s/ ~~EUNICE HARPS~~ANDREW BLOCH	Director of the General Partner	~~November 8, 2017~~August 7, 2020
Andrew Bloch

/s/ EUNICE HARPS	Director of the General Partner	August 7, 2020
Eunice Harps

/s/ SALLY MICHAEL	Director of the General Partner	August 7, 2020
Sally Michael

/s/ ROBERT SOMMA	Director of the General Partner	August 7, 2020
Robert Somma

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	September 30,		December 31,
	2017		2016
ASSETS		(Unaudited)
Rental Properties	$	209,149,689	$	169,462,811
Cash and Cash Equivalents		14,913,412		7,463,697
Rents Receivable		559,048		567,627
Insurance Recovery Receivable		46,889		700,932
Real Estate Tax Escrows		481,982		444,625
Prepaid Expenses and Other Assets		4,180,236		3,585,870
Investments in Unconsolidated Joint Ventures		8,452,484		8,336,505
Total Assets	$	237,783,740	$	190,562,067
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable		233,615,499		212,709,080
Notes Payable		25,000,000		—
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		2,737,854		2,577,606
Accounts Payable and Accrued Expenses		3,157,249		4,052,095
Advance Rental Payments and Security Deposits		5,649,396		5,448,011
Total Liabilities		270,159,998		224,786,792
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 124,386 and 124,409 units outstanding in 2017 and 2016 respectively		(32,376,258)		(34,224,725)
Total Liabilities and Partners’ Capital	$	237,783,740	$	190,562,067


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenues
Rental income	$	13,321,770	$	12,273,589	$	38,636,732	$	36,482,801
Laundry and sundry income		100,035		98,292		316,471		326,633
		13,421,805		12,371,881		38,953,203		36,809,434
Expenses
Administrative		525,125		524,293		1,513,869		1,477,708
Depreciation and amortization		3,664,997		3,079,368		9,647,751		9,167,516
Management fee		544,399		511,730		1,599,647		1,513,226
Operating		1,051,910		995,787		3,797,935		3,489,724
Renting		301,423		301,696		482,157		544,923
Repairs and maintenance		2,678,780		2,364,364		6,187,673		6,185,250
Taxes and insurance		1,727,218		1,496,807		5,083,674		4,684,062
		10,493,852		9,274,045		28,312,706		27,062,409
Income Before Other Income (Expense)		2,927,953		3,097,836		10,640,497		9,747,025
Other Income (Expense)
Interest income		416		305		1,132		710
Interest expense		(3,046,818)		(2,553,771)		(8,113,197)		(7,650,096)
Income from investments in unconsolidated joint ventures		990,169		562,584		2,721,231		1,220,666
Gain on the sale of real estate		—		103,793		—		103,793
		(2,056,233)		(1,887,089)		(5,390,834)		(6,324,927)
Net Income	$	871,720	$	1,210,747	$	5,249,663	$	3,422,098

Net Income per Unit	$	7.01	$	9.69	$	42.20	$	27.38

Weighted Average Number of Units Outstanding		124,387		124,923		124,394		124,995


	Units						Partners’s Capital
	Limited		General		Treasury		Limited				General
	Class A	Class B	Partnership	Subtotal	Units	Total	Class A		Class B		Partnership		Total
Balance January 1, 2016	144,180	34,243	1,802	180,225	54,851	125,374	$	(24,673,535)	$	(5,830,548)	$	(306,870)	$	(30,810,953)
Distribution to Partners	—	—	—	—	—	—		(2,248,621)		(534,047)		(28,108)		(2,810,776)
Stock Buyback	—	—	—	—	451	(451)		(558,723)		(128,874)		(6,783)		(694,380)
Net Income	—	—	—	—	—	—		2,737,678		650,199		34,221		3,422,098
Balance September 30, 2016	144,180	34,243	1,802	180,225	55,302	124,923	$	(24,743,201)		(5,843,270)		(307,540)		(30,894,011)

Balance January 1 , 2017	144,180	34,243	1,802	180,225	55,816	124,409	$	(27,407,924)	$	(6,475,961)	$	(340,840)	$	(34,224,725)
Distribution to Partners	—	—	—	—	—	—		(2,686,919)		(638,143)		(33,586)		(3,358,648)
Stock Buyback	—	—	—	—	23	(23)		(34,038)		(8,084)		(426)		(42,548)
Net Income	—	—	—	—		—		4,199,730		997,436		52,497		5,249,663
Balance September 30, 2017	144,180	34,243	1,802	180,225	55,839	124,386	$	(25,929,151)	$	(6,124,752)	$	(322,355)	$	(32,376,258)


2018—current maturities	$	1,823,000
2019		7,903,000
2020		4,324,000
2021		2,312,000
2022		2,561,000
Thereafter		216,153,000
		235,076,000
Less: unamortized deferred financing costs		(1,461,000)
	$	233,615,000


		Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At September 30, 2017	*	$	233,615,499	$	240,513,012
At December 31, 2016	*	$	212,709,080	$	219,086,450
Investment Properties
At September 30, 2017	*	$	124,550,899	$	127,162,361
At December 31, 2016	*	$	130,152,297	$	133,991,269