Real-time Form 4 intelligence. Smarter insider tracking.
YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.06pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
-0.06pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
litigation+1
slowing+1
Positive rising
advances+1
improvement+1
MD&A (Item 7)
8,885 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT S 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 Reform Act of 1995. Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management’s faith belief when those statements are made, and are based on information currently available to management. 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 for 2025 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove , actual results may vary materially from those anticipated, estimated or projected. We expressly any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use 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.
Along with risks detailed in Item “1A Risk Factors” 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.
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 underinsuredlosses.
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.
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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 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.
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. 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.
General
On February 24, 2019, Harold Brown, the owner of 75% of the outstanding voting securities of NewReal, Inc. (“NewReal”), the general partner of New England Realty Associates Limited Partnership, passed away. As a result, the estate of Harold Brown held voting control over the capital stock of NewReal. On January 2, 2024, the estate was settled, with Jameson Brown and Harley Brown each assuming 37.5% ownership in NewReal. As of February 1, 2026, the Brown family related entities and Ronald Brown collectively own approximately 34.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Brown family related entities also control 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, the Partnership’s sole general partner. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of the capital stock of NewReal. In addition, Ronald Brown is the President and a director of NewReal and Jameson Brown is Treasurer and a director of NewReal. Moreover, 75% of the issued and outstanding
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Class B units of the Partnership are owned by HBC Holdings LLC, an entity of which Jameson Brown is the manager. The outstanding stock of The Hamilton Company is controlled by Jameson Brown and Harley Brown.
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 were 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 vacancy rate for the Partnership’s residential properties as of February 1, 2026 was 4.4% as compared with a vacancy rate of 2.3% as of February 1, 2025. The vacancy rate for the Joint Venture properties as of February 1, 2026 was 2.3%, as compared to 1.9% for the same period last year. Approximately half of the Partnership’s overall vacancy is attributable to Hill Estates, which has several units under renovation, and Mill Street Heights, a new property currently in lease-up.
Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the year. As we move from 2025 into 2026, management expects a rental market with slowing rent growth.
During the fourth quarter of 2025, rents increased on average 4.6% for renewals and decreased on average 4.2% for new leases. For all of 2025, renewal rents increased approximately 5.3% and decreased approximately 0.5% for new leases.
The Partnership purchased a commercial retail property of approximately 20,700 square feet, located at 653 Worcester Road in Framingham, Massachusetts for approximately $10,151,000 on January 18, 2023. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $59,000. From the purchase price, the Partnership allocated approximately $585,000 for in- place leases, and approximately $378,000 to the value of tenant relationships. These amounts are being amortized over 12 and 156 months respectively.
On July 14, 2023, the Partnership purchased a 52 unit mixed use property in the South End neighborhood of Boston, MA comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and approximately 3,400 square feet of commercial space for a purchase price of approximately $27,500,000. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $81,000. From the purchase price, the Partnership allocated approximately $525,000 for in-place leases, approximately $61,000 to the value of tenant relationships and $241,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months, respectively.
On May 30, 2025, the Partnership borrowed $18,664,000 at a fixed interest rate of 5.84%. Proceeds were used to refinance the existing mortgage on Hamilton Highlands. Also on May 30, 2025, the Partnership borrowed an additional $40,000,000 at a fixed rate of 5.99%. Proceeds were subsequently used for the purchase of Hill Estates. Both advances were made from the existing Master Credit Facility as amended with KeyBank.
On June 18, 2025, the Partnership, through its subsidiaries, purchased a mixed-use property comprising 396 residential units and 3 commercial units in Belmont, Massachusetts for $172,000,000. Closing costs were approximately $218,000. Additionally, the Partnership, through its subsidiaries, purchased two commercial properties for $3,000,000 in Belmont, Massachusetts. The property acquisitions were financed through proceeds from the sale of U.S. Treasury bills, additional borrowings on the Master Credit Facility of $40,000,000, and proceeds of an interim mortgage loan of $67,500,000. From the purchase price, the Partnership allocated approximately $4,714,000 for in-place leases, approximately $305,000 to the value of tenant relationships and $1,165,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months respectively.
For the year ending December 31, 2025 consolidated revenue increased by 10.8%, operating expenses increased by 22.3% and Income before Other Income (Expense) decreased by 14.3%. For the fourth quarter of 2025, consolidated revenue increased by 15.7%, operating expenses increased by 44.3% and Income before Other Income (Expense)
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decreased by 43.9%, as compared to the fourth quarter of 2024. Excluding Hill Estates, consolidated revenue increased by 3.1%, operating expenses increased by 4.2% and Income before Other Income (Expense) increased by 0.5%.
On June 16, 2022, the Partnership entered into an amendment to the Facility Agreement. The additional advance under the Amended Agreement is in the amount of $80,284,000, at a fixed interest rate of 4.33%. The Partnership’s obligations under the Facility Agreement are secured by mortgages on certain properties pursuant to certain Mortgage, Assignment of Leases and Rents, and Security Agreement and Fixture Filings.
The Partnership used the proceeds to pay down approximately $37,065,000 of existing debt secured by four properties, along with approximately $854,000 in prepayment penalties. The remaining balance of approximately $42,384,000 will be used for general partnership purposes.
On October 14, 2022, the Partnership refinanced its loan with Brookline Bank on 659-665 Worcester Road, Framingham, MA. The loan extended the maturity until October 14, 2032, at a variable interest rate of SOFR rate, plus 1.7% interest only for two years and amortizing using a thirty-year schedule for the balance of the term. At closing, the Partnership entered into an interest rate swap contract with Brookline Bank with a notional amount equivalent to the underlying loan principal amortization, resulting in a fixed rate of 4.60% through the expiration of the interest rate swap contract. As part of the underlying loan’s earnout provision, on July 10, 2025, the Partnership financed an additional $682,520 at an interest rate of 5.97% that will be conterminous with the existing loan.
On November 21, 2024, the Partnership entered into an agreement for a new $25,000,000 revolving line of credit. The term of the line is for three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a debt yield of at least 8.5%. The Partnership incurred a commitment fee of $125,000. As of December 31, 2025, the Partnership was in compliance with the financial covenants.
The Repurchase Program that was initiated in 2007 has purchased 1,559,409 Depositary Receipts through December 31, 2025, or approximately 36% of the outstanding Depositary Receipts. The Partnership purchased 9,051 Depositary Receipts in 2025 .
In March of 2020, the Board of Advisors and Board of Directors unanimously approved an extension of the Repurchase Program until March 31, 2025. On March 12, 2025, the Board of Directors unanimously approved a new extension to the Repurchase Program, authorizing the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written trading plan that complies with the requirements of Rule 10b5-1, Depository Receipts and Partnership Units such that (i) the aggregate cost of Depository Receipts and Partnership Units repurchased shall not exceed the lesser of $5 million or 10% of the Partnership’s balance of cash and investment in treasury bills, (ii) no Depository Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date of the plan, and (iii) no Depository Receipts or Partnership Units shall be repurchased in excess of $95 per Depository Receipt. The Repurchase Plan requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership Agreement. This repurchase authorization replaces the Partnership’s previous repurchase program. The Repurchase Plan shall be made in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be made in accordance with all applicable laws and regulations in effect from time to time. On March 11, 2026, the General Partner authorized the President and Treasurer to renew the Repurchase Plan for one year.
Management believes that the $25,000,000 line of credit, net cash flow from operations and cash on hand have put the Partnership in position to capitalize on investment opportunities should they reveal themselves in the near future. As always, management continues to weigh investment alternatives of stock repurchase, new property acquisitions and dispositions when considering its cash balances and performance of the portfolio.
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The Partnership has retained the Hamilton Company, Inc. (“Hamilton”) to manage and administer the Partnership’s and Joint Ventures’ Properties. Hamilton is a full-service real estate management company, which has legal, construction, maintenance, architectural, accounting and administrative departments. The Partnership’s properties represent approximately 44% of the total properties and 60% of the residential properties managed by Hamilton. Substantially all of the other properties managed by Hamilton are owned, wholly or partially, directly or indirectly, by the Brown Family related entities. The Partnership’s Second Amended and Restated Contract of Limited Partnership (the “Partnership Agreement”) expressly provides that the general partner may employ a management company to manage the properties, and that such management company may be paid a fee of up to 4% of rental receipts for administrative and management services (the “Management Fee”). The Partnership pays Hamilton the annual Management Fee in monthly installments.
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 the General Partner 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.
In 2025, tenant renewals were approximately 73% with an average rental increase of approximately 5.3%. New leases accounted for approximately 27% with rental rate decreases of approximately 0.5%. In 2025, leasing commissions were approximately $914,000 compared to approximately $616,000 in 2024, an increase of approximately $297,000 (48.2%) from 2024. Tenant concessions were approximately $71,000 in 2025 compared to approximately $104,000 in 2024, a decrease of approximately $33,000 (31.7%). Tenant improvements were approximately $3,901,000 in 2025 compared to approximately $3,579,000 in 2024, an increase of approximately $322,000 (9.0%).
Hamilton accounted for approximately 1.4% of the repair and maintenance expense paid for by the Partnership in the year ended December 31, 2025 and 1.3% in the year ended December 31, 2024. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters. 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, Hamilton prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately 42.0% and 42.5% of the legal services paid for by the Partnership during the years ended December 31, 2025 and 2024, respectively.
Additionally, as described in Note 3 to the Consolidated Financial Statements, the Hamilton Company receives similar fees from the Investment Properties.
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. In 2025, Hamilton provided the Partnership approximately $1,498,000 in construction and architectural services, compared to $504,000 for the year ended December 31, 2024.
Bookkeeping and accounting functions have been provided by Hamilton’s accounting staff, which consists of approximately 16 people. In 2025, Hamilton charged the Partnership $125,000 per year ($31,250 per quarter) 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 leases 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 revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.
The Partnership evaluates the non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues). 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.
Rental Property Held f or 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
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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. Costs directly related to the acquisition, development and construction of rental properties are capitalized. Capitalized development and construction costs include pre-construction costs, development and construction costs, regulatory fees, interest, property taxes, insurance, construction oversight fees, and other project costs incurred during the period of development. The Partnership considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity.
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 is amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles is 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.
Investments in Treasury Bills: Investments in Treasury Bills are recorded at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature. The carrying value of the Treasury Bills is adjusted for accretion of discounts over the remaining life of the investment. Income related to the Treasury Bills is recognized in interest income in the Partnership’s consolidated statement of income.
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 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 analysis may not be achieved.
Investments in Joint Ventures: The Partnership accounts for its 40%-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
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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.
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 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.
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 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
Years Ended December 31, 2025 and December 31, 2024
The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and loss of approximately $21,349,000 during the year ended December 31, 2025, compared to approximately $25,371,000 for the year ended December 31, 2024, a decrease of approximately $4,022,000 (15.9%).
The rental activity is summarized as follows:
Occupancy Date
February 1, 2026
February 1, 2025
Residential
Units
Vacancies
Vacancy rate
Commercial
Total square feet
Vacancy
Vacancy rate
Rental Income (in thousands)
Year Ended December 31,
Total
Continuing
Total
Continuing
Operations
Operations
Operations
Operations
Total rents
Residential percentage
Commercial percentage
Contingent rentals
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024:
Year Ended December 31,
Dollar
Percent
Change
Change
Revenues
Rental income
Laundry and sundry income
Expenses
Administrative
Depreciation and amortization
Management fee
Operating
Renting
Repairs and maintenance
Taxes and insurance
Property impairment
Income Before Other Income (Expense)
Other Income (Expense)
Interest income
Interest expense
Income from investments in unconsolidated joint ventures
Net Income
Rental income from continuing operations for the year ended December 31, 2025 was approximately $88,401,000, compared to approximately $79,763,000 for the year ended December 31, 2024, an increase of approximately $8,638,000 (10.8%). Excluding revenues from the Hill Estates, 26 Brighton Avenue, and the 90 Concord properties of approximately $6,177,000, there was an increase of approximately $2,461,000 (3.1%).
The Partnership Properties with the largest increases in rental income include Westside Colonial, Hamilton Oaks, Westgate Apartments, Hamilton Green, and School Street, with increases of approximately $257,000, $246,000, $239,000, $207,000 and $198,000, 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.
Total expenses from continuing operations for the year ended December 31, 2025 were approximately $67,847,000 compared to approximately $55,161,000 for the year ended December 31, 2024, an increase of approximately $12,686,000 (23.0%). Excluding expenses from the Hill Estates, 26 Brighton Avenue, and the 90 Concord properties of approximately $9,967,000, there was an increase of approximately $2,719,000 (4.9%). Factors which contributed to the increase were an increase in Operating expenses of approximately $1,340,000 (17.2%), due to increases in snow removal costs and utility expenses, an increase in Repairs and Maintenance expense of approximately $949,000 (7.2%), an increase in Taxes and Insurance of approximately $651,000(6.5%), due to an increase in real estate taxes.
Interest income for the year ended December 31, 2025 was approximately $1,795,000 compared to approximately $4,465,000 for the year ended December 31, 2024, a decrease of approximately $2,670,000 (59.8%). The decrease in the interest income is due to the use of the Investment in U.S. Treasury bills to acquire the Hill Estates, 26 Brighton Avenue, and 90 Concord properties.
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Interest expense for the year ended December 31, 2025 was approximately $18,586,000 compared to approximately $15,457,000 for the year ended December 31, 2024, an increase of approximately $3,129,000 (20.2%). Excluding interest expense for the Hill Estates of approximately $2,244,000, interest expense increased approximately $885,000 (5.7%). The increase was due to the interest expense incurred when the Partnership borrowed an additional $40,000,000 in May, 2025 at an interest rate of 5.99% on the Master Credit Facility.
At December 31, 2025, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.
As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $1,474,000 for the year ended December 31, 2025, compared to net income of approximately $1,282,000 for the year ended December 31, 2024, an increase in income of approximately $192,000 (15.0%). This increase is primarily due to rental revenue of approximately $12,259,000 for the year ended December 31, 2025 compared to approximately $11,689,000 for the year ended December 31, 2024, an increase of approximately $570,000 (4.9%). Included in the income for the year ended December 31, 2025 is depreciation and amortization expense of approximately $2,644,000.
As a result of the changes discussed above, net income for the year ended December 31, 2025 was approximately $6,031,000 compared to net income of approximately $15,661,000 for the year ended December 31, 2024, a decrease in income of approximately $9,630,000 (61.5%).
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Years Ended December 31, 2024 and December 31, 2023
The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and loss of approximately $25,371,000 during the year ended December 31, 2024, compared to approximately $18,815,000 for the year ended December 31, 2023, an increase of approximately $6,556,000 (34.8%).
The rental activity is summarized as follows:
Occupancy Date
February 1, 2025
February 1, 2024
Residential
Units
Vacancies
Vacancy rate
Commercial
Total square feet
Vacancy
Vacancy rate
Rental Income (in thousands)
Year Ended December 31,
Total
Continuing
Total
Continuing
Operations
Operations
Operations
Operations
Total rents
Residential percentage
Commercial percentage
Contingent rentals
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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023:
Year Ended December 31,
Dollar
Percent
Change
Change
Revenues
Rental income
Laundry and sundry income
Expenses
Administrative
Depreciation and amortization
Management fee
Operating
Renting
Repairs and maintenance
Taxes and insurance
Property impairment
Income Before Other Income ( Expense)
Other Income (Expense)
Interest income
Interest (expense)
Income from investments in unconsolidated joint ventures
Net Income
Rental income from continuing operations for the year ended December 31, 2024 was approximately $79,763,000, compared to approximately $73,892,000 for the year ended December 31, 2023, an increase of approximately $5,871,000 (7.9%). Excluding the net increase in revenue from Shawmut of approximately $1,270,000, there was an increase of approximately $4,601,000 (6.3%).
The Partnership Properties with the largest increases in rental income include Hamilton Oaks, 62 Boylston Street Apartments, Mill Street Gardens, 659 Worcester Road, and 1144 Commonwealth Apartments, with increases of approximately $522,000, $446,000, $393,000, $337,000 and $303,000, 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.
Total expenses from continuing operations for the year ended December 31, 2024 were approximately $55,161,000 compared to approximately $55,666,000 for the year ended December 31, 2023, a decrease of approximately $505,000 (0.9%). Excluding the net change in expenses from Shawmut’s of approximately $953,000, there was a decrease of approximately $1,458,000 (2.7%). Factors which contributed to the decrease were a decrease of approximately $971,000, for the Impairment charge in 2023 for Mill Street Development, a decrease in Depreciation and Amortization expense of approximately $480,000 (0.9%), due to fully depreciated assets, and a decrease in Repairs and Maintenance expense of approximately $340,000 (0.6%), primarily due to a decrease in window, door, and glass repairs.
Interest income for the year ended December 31, 2024 was approximately $4,466,000 compared to approximately $4,487,000 for the year ended December 31, 2023, a decrease of approximately $21,000. The decrease is due to a decrease in interest rates for investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.2% to 5.0%.
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Interest expense for the year ended December 31, 2024 was approximately $15,457,000 compared to approximately $15,723,000 for the year ended December 31, 2023, a decrease of approximately $266,000 (1.7%). The decrease is due to the greater amortization of principal for debt with level principal and interest payments.
At December 31, 2024, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.
As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $1,282,000 for the year ended December 31, 2024, compared to net income of approximately $876,000 for the year ended December 31, 2023, an increase in income of approximately $406,000 (46.3%). This increase is primarily due to rental revenue of approximately $11,689,000 for the year ended December 31, 2024 compared to approximately $11,132,000 for the year ended December 31, 2023, an increase of approximately $557,000 (5.0%). Included in the income for the year ended December 31, 2024 is depreciation and amortization expense of approximately $2,617,000.
As a result of the changes discussed above, net income for the year ended December 31, 2024 was approximately $15,662,000 compared to net income of approximately $8,454,000 for the year ended December 31, 2023, an increase in income of approximately $7,208,000 (85.3%).
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LIQUIDITY AND CAPITAL RESOURCES
The Partnership’s principal source of cash during 2025 was the proceeds from the increase in mortgage notes payable, the liquidation of U.S Treasury bills, and the collection of rents. The Partnership’s principal use of cash during 2025 was the purchase of a new property, construction of the Mill Street Development project, improvements to rental properties, mortgage principal payments, and distributions to partners.
The Partnership’s principal source of cash during 2024 was the collection of rents, and interest income generated from the purchase of Treasury Bills. The Partnership’s principal use of cash during 2024 was the improvements to rental properties, the development of a rental property at Mill Street, and distributions to partners.
The majority of cash and cash equivalents of $26,668,978 at December 31, 2025 and $17,615,940 at December 31, 2024 were held in interest bearing accounts at creditworthy financial institutions.
The increase in cash of $9,053,038 at December 31, 2025 is summarized as follows:
Year Ended December 31,
Cash provided by operating activities
Cash (used in) investing activities
Cash provided by (used in) financing activities
Repurchase of Depositary Receipts, Class B and General Partner Units
Distributions paid
Net increase (decrease) in cash and cash equivalents
The net increase in cash provided by operating activities is due to various factors, including a change in depreciation expense, a change in income and distribution from joint ventures, and other factors. The net decrease in cash used in investing activities is primarily for the purchase of the Hill Estates, 26 Brighton Avenue and 90 Concord properties, improvement of rental properties, including the Mill Street Development project, offset by the proceeds of U.S. Treasury bills. Financing activities include proceeds from the mortgage notes payable, mortgage principal payments and distributions to partners, and repurchase of depositary receipts.
During 2025, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $30,691,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. Cash reserves used for the Mill Street Development Project were approximately $17,599,000 for the year ended December 31, 2025. Beyond the Mill Street Development Project, the most significant improvements were made at 62 Boylston, 1137 Commonwealth, Executive Apartments, Clovelly Apartments, Hamilton Oaks, and Captain Parker, at a cost of $2,065,000, $1,980,000, $903,000, $879,000, $799,000, and $733,000, respectively. The Partnership plans to invest approximately $17,069,000 in capital improvements for all properties in 2026.
On December 23, 2025, the Partnership closed a $17,500,000 loan in association with the project, with Brookline Bank at an interest rate of 5.67% interest only with a two year term. As of December 31,2025, the Partnership has invested approximately $35 million in the Mill Street Development project.
Line of Credit
On November 21, 2024, the Partnership entered into an agreement for a new $25,000,000 revolving line of credit. The term of the line is for three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a debt yield of at least 8.5%. The Partnership incurred a commitment fee of $125,000. As of December 31, 2025, the Partnership was in compliance with the financial covenants.
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The line of credit may be used for acquisition, refinancing, improvements, working capital and other needs of the Partnership. The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.
The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 29 of its subsidiary properties and joint ventures. Pledged interests are 49% of the Partnership’s ownership interest in the respective entities.
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 to 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.
As of December 31, 2025, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, which all have mortgage indebtedness except Hancock 1025, and Hamilton Essex Development. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At December 31, 2025, our proportionate share of the non-recourse debt before unamortized deferred financing costs related to these investments was approximately $74,898,000. See Note 15 to the Consolidated Financial Statements.
Contractual Obligations
As of December 31, 2025, we are subject to contractual payment obligations as described in the table below.
Payments due by period
Thereafter
Total
Contractual Obligations
Long -term debt
Mortgage debt
Total Contractual Obligations
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 cancellationpenalties.
See Notes 5 and 15 to the Consolidated Financial Statements for a description of mortgage notes payable. The Partnership has no other material contractual obligations to be disclosed.
