Quarterly report
Page 1
Table of Contents 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 For the quarterly period ended June 30 , 2026 ☐ OR 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 Massachusetts ( Exact name of registrant as specified in its charter ) ( State or other jurisdiction of incorporation or organization ) 39 Brighton Avenue , Allston , Massachusetts ( Address of principal executive offices ) 04-2619298 ( I.R.S. employer identification no . ) 02134 ( Zip Code ) Registrant's telephone number , including area code : ( 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 , every Interactive Data File required to be submitted 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 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 □ Non - accelerated filer ☐ Accelerated Filer ☑ 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 : Class A NEN Trading Symbol Name of each exchange on which registered : NYSE MKT Exchange As of August 7 , 2026 , there were 92,475 of the registrant's Class A units ( 2,774,254 Depositary Receipts ) of limited partnership issued and outstanding and 21,963 Class B units issued and outstanding .
Page 2
Table of Contents 2 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP INDEX PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 3 Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 4 Consolidated Statements of Income for the Three and Six Months Ended June 30, 2026 and 2025 5 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 6 Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2026 and 2025 7 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 8 Notes to Consolidated Financial Statements 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3. Quantitative and Qualitative Disclosures About Market Risk 43 Item 4. Controls and Procedures 43 PART II—OTHER INFORMATION Item 1. Legal Proceedings 43 Item 1A.Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosure 45 Item 5. Other Information 45 Item 6. Exhibits 45 SIGNATURES 46
Page 3
Table of Contents 3 NEW ENGLAND REALTY ASSOCIATES, L.P. PART 1 -- FINANCIAL INFORMATION Item 1. Financial Statements The accompanying unaudited consolidated balance sheets, statements of income, statements of comprehensive 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, 2025, 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, 2025. The results of operations for the three and six month periods ended June 30, 2026 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.
Page 4
Table of Contents 4 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, December 31, 2026 2025 ASSETS (Unaudited) Rental Properties $ 452,146,015 $ 458,779,526 Real Estate Assets Held for Sale — 2,608,526 Cash and Cash Equivalents 24,749,739 26,668,978 Rents Receivable 1,840,493 1,428,053 Real Estate Tax Escrows 3,284,627 3,057,689 Prepaid Expenses and Other Assets 10,498,226 11,381,248 Investments in Unconsolidated Joint Ventures 1,404,791 1,407,171 Total Assets $ 493,923,891 $ 505,331,191 LIABILITIES AND PARTNERS’ CAPITAL Mortgage Notes Payable 526,244,604 527,596,823 Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture 30,742,690 30,795,117 Accounts Payable and Accrued Expenses 7,733,459 8,866,529 Advance Rental Payments and Security Deposits 12,425,818 12,288,303 Total Liabilities 577,146,571 579,546,772 Commitments and Contingent Liabilities (Notes 3 and 9) — — Partners’ Capital 115,624 and 116,299 units outstanding in 2026 and 2025 respectively (83,222,680) (74,215,581) Total Liabilities and Partners’ Capital $ 493,923,891 $ 505,331,191 See notes to consolidated financial statements.
Page 5
Table of Contents 5 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months EndedJune 30, June 30, 2026 2025 2026 2025 Revenues Rental income $24,183,592 $21,037,991 $48,140,056 $41,534,111 Laundry and sundry income 219,745 202,117 424,408 394,891 24,403,337 21,240,108 48,564,464 41,929,002 Expenses Administrative 896,512 667,913 2,285,818 1,289,179 Depreciation and amortization 8,101,809 4,474,748 16,067,020 8,379,730 Management fee 927,604 834,431 1,843,423 1,652,840 Operating 2,254,725 1,704,150 7,438,544 4,982,524 Renting 576,817 256,198 1,033,157 534,527 Repairs and maintenance 4,164,444 3,481,815 7,465,529 6,340,084 Taxes and insurance 3,441,047 2,757,280 6,894,413 5,453,097 20,362,958 14,176,535 43,027,904 28,631,981 Income Before Other Income (Expense) 4,040,379 7,063,573 5,536,560 13,297,021 Other Income (Expense) Interest income 105,259 737,413 221,393 1,728,487 Interest expense (5,731,689) (4,136,156) (11,444,016) (7,927,588) Income from investments in unconsolidated joint ventures 426,744 485,051 770,046 847,679 (Loss) on Sale of Real Estate — — (150,963) — (5,199,686) (2,913,692) (10,603,540) (5,351,422) Net (Loss) Income $(1,159,307) $ 4,149,881 $ (5,066,980) $ 7,945,599 Net (Loss) Income per Unit $ (9.99) $ 35.59 $ (43.63) $ 68.12 Weighted Average Number of Units Outstanding 116,017 116,608 116,134 116,641 See notes to consolidated financial statements.
Page 6
Table of Contents 6 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Six Months EndedJune 30, June 30, 2026 2025 2026 2025 Net (Loss) Income $(1,159,307) $4,149,881 $(5,066,980) $7,945,599 Net unrealized gain (loss) on derivative instruments for interest rate swaps 58,364 (64,024) 83,070 (193,914) Comprehensive (Loss) income $(1,100,943) $4,085,857 $(4,983,910) $7,751,685 See notes to consolidated financial statements.
Page 7
Table of Contents 7 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (Unaudited) Units Partner’s Capital Limited General Treasury Limited General Accumulated Class A Class B Partnership Subtotal Units Total Class A Class B PartnershipComprehensive Income Total BalanceJanuary 1,2025 144,180 34,243 1,802 180,225 63,549 116,676 $(50,305,360) (11,910,628) (626,877) 408,962 $(62,433,903)Distributionto Partners — — — — — (11,199,922) (2,659,981) (139,999) — (13,999,902)StockBuyback — — — — 125 (125) (233,167) (55,080) (2,971) — (291,218)Net Income — — — — — — 6,356,479 1,509,664 79,456 — 7,945,599Net unrealized (loss) on derivative instruments for interest rate swaps — — — — — — — — (193,914) (193,914)BalanceJune 30 ,2025 144,180 34,243 1,802 180,225 63,674 116,551 $(55,381,970) $(13,116,025) $ (690,391) 215,048 $(68,973,338)—BalanceJanuary 1,2026 144,180 34,243 1,802 180,225 63,926 116,299 $(59,572,858) (14,110,721) (742,744) 210,740 (74,215,581)Distributionto Partners — — — — — — (2,225,953) (528,664) (27,824) — (2,782,441)StockBuyback — — — — 675 (675) (992,871) (235,483) (12,394) — (1,240,748)Net (Loss) — — — — — — (4,053,584) (962,726) (50,670) — (5,066,980)Net unrealized gain on derivative instruments for interest rate swaps — — — — — — — — — 83,070 83,070BalanceJune 30,2026 144,180 34,243 1,802 180,225 64,601 115,624 $(66,845,266) (15,837,594) (833,632) 293,810 (83,222,680) See notes to consolidated financial statements.
Page 8
Table of Contents 8 NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2026 2025 Cash Flows from Operating Activities Net (Loss) Income $(5,066,980) $ 7,945,599 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 16,067,020 8,379,730 Amortization of deferred finance costs 278,027 211,434 (Income) from investments in joint ventures (770,046) (847,679) Loss on sale of real estate 150,963 — Change in operating assets and liabilities Proceeds from unconsolidated joint ventures 50,000 62,500 (Increase) in rents receivable (412,440) (74,947) (Decrease) in accounts payable and accrued expense (1,114,254) (1,462,963) (Increase) Decrease in real estate tax escrow (226,938) 63,807 (Increase) Decrease in prepaid expenses and other assets (1,523,072) 1,510,783 Increase in advance rental payments and security deposits 137,515 2,220,108 Total Adjustments 12,636,775 10,062,773 Net cash provided by operating activities 7,569,795 18,008,372 Cash Flows From Investing Activities Distribution in excess of investment in unconsolidated joint ventures 670,000 775,000 Investment in U.S. Treasury bills — (31,060,131) Proceeds from U.S. Treasury bills — 113,708,456 Developing of rental property and other related costs — (10,247,195) Purchase of rental property — (108,885,341) Improvement of rental properties (6,944,345) (5,210,753) Net proceeds from the sale of real estate 2,438,747 — Net cash (used in) investing activities (3,835,598) (40,919,964) Cash Flows from Financing Activities Principal payments of mortgage notes payable (1,630,247) (20,482,614) Proceeds from Mortgage Notes Payable — 56,746,890 Stock buyback (1,240,748) (291,218) Distributions to partners (2,782,441) (13,999,902) Net cash provided by (used in) financing activities (5,653,436) 21,973,156 Net (Decrease) in Cash and Cash Equivalents (1,919,239) (938,436) Cash and Cash Equivalents, at beginning of period 26,668,978 17,615,940 Cash and Cash Equivalents, at end of period $24,749,739 $ 16,677,504 See notes to consolidated financial statements.
Page 9
Table of Contents NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2026 (Unaudited) NOTE 1. SIGNIFICANT ACCOUNTING POLICIES Line of Business: New England Realty Associates Limited Partnership (“NERA”, the “Company” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 32 properties which include 21 residential buildings; 6 mixed use residential, retail and office buildings; 4 commercial buildings and individual units at one condominium complex. These properties total 3,411 apartment units, 19 condominium units and approximately 141,000 square feet of commercial space. Additionally, the Partnership also owns a 40 - 50% interest in 7 residential and mixed use properties consisting of 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. Judgments 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 seven 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 15: Investment in Unconsolidated Joint 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 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 15: 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.
Page 10
9 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
Page 11
Table of Contents 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. 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 revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases. 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. 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
Page 12
10 Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing
Page 13
Table of Contents 11 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. 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 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 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 $278,000 and $211,000 for the six months ended June 30, 2026 and 2025, respectively. Derivative Instruments: The Partnership measures derivative instruments, including certain derivative instruments embedded in other contracts, at fair value and records them as an asset or liability, depending upon the Partnership’s rights or obligations under the applicable derivative contract. For derivatives designated and qualifying as fair value hedges, the changes in the fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other comprehensive income (“OCI”) and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging and ineffective portions of hedges are recognized in earnings in the affected period. Income Taxes: The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes has been recorded (See Note 14). 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 segment. Other Comprehensive Income (Loss): Other comprehensive income (loss) includes items that are recorded in equity, such as effective portions of derivatives designated as cash flow hedges or unrealized holding gains or losses on
Page 15
Table of Contents 12 marketable securities available for sale. NERA had a comprehensive gain of approximately $83,000 and a comprehensive loss of approximately $194,000 for the six months ended June 30, 2026 and 2025, respectively. 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: Partners’ 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 2026 or 2025. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2026, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates, respectively, from 0.35% to 2.8%. At June 30, 2026 and December 31, 2025, respectively, approximately $27,415,000, and $26,200,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts. Advertising Expense: Advertising is expensed as incurred. Advertising expense was approximately $199,000 and $160,000 for the six months ended June 30, 2026 and 2025, respectively. Rental Property Held 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. 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 six months ended June 30, 2026 there was no interest capitalized. For the six months ended June 30, 2025, there was capitalized interest of approximately $360,000. Extinguishment of Debt: When existing mortgages are refinanced with the same lender, and it is determined that refinancing is substantially different, then they are recorded as extinguishement of debt. However, if it is determined that the refinancing is substantially the same, then they are recorded as an exchange of debt. All refinancings qualify as extinguishment of debt. Reclassification: Certain reclassifications have been made to prior period amounts in order to conform to current period presentation. NOTE 2. RENTAL PROPERTIES As of June 30, 2026, the Partnership and its Subsidiary Partnerships owned 3,411 residential apartment units in 27 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 June 30, 2026, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline, commercial space in mixed-use properties in Boston, Brockton, Belmont and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”
Page 17
Table of Contents The Partnership also owned a 40% to 50% ownership interest in seven residential and mixed use complexes (the “Investment Properties”) at June 30, 2026 with a total of 688 apartment units, accounted for using the equity method of consolidation. See Note 15 for summary information on these investments. On June 18, 2025, the Partnership, through its subsidiaries, purchased a mixed-use property comprising 396 residential units and 3 commercial units in Belmont, Massachusetts for $172,000,000. Closing costs were approximately $218,000. Additionally, the Partnership, through its subsidiaries, purchased two commercial properties for $3,000,000 in Belmont, Massachusetts. The property acquisitions were financed through proceeds from the sale of U.S. Treasury bills, additional borrowings on the Master Credit Facility of $40,000,000, and proceeds of an interim mortgage loan of $67,500,000. From the purchase price, the Partnership allocated approximately $4,714,000 for in-place leases, approximately $305,000 to the value of tenant relationships and $1,165,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months respectively. The loan was refinanced on December 30, 2025. The refinanced loan for $67,656,000 is interest only at a rate of 5.19% and a maturity date of December 30, 2035. On January 28, 2026, the Partnership sold the two commercial office buildings for the sales price of approximately $2,600,000, with closing costs of approximately $142,000, incurring an additional loss of approximately $151,000. In December, 2023, the Partnership received approval from MassHousing to construct a 72 unit apartment building in accordance with Chapter 40B to include 17 affordable units on the Mill Street Development site. In addition, Mill Street Development deposited $75,000 into escrow to comply with the 40B project requirement of a cost certification of total development costs upon completion of the project. The Partnership demolished the existing building structures in order to start construction in 2024. The property was placed in service on January 1, 2026. Total investment was approximately $35 million. On December 23, 2025, the Partnership closed a $17,500,000 loan with Brookline Bank at an interest rate of 5.68% interest only, with a two year term. Rental properties consist of the following: June 30, 2026 December 31, 2025 Useful Life Land, improvements and parking lots $147,274,598 $ 143,883,155 15 - 40years Buildings and improvements 408,307,287 386,494,391 15 - 40years Construction in Progress 4,423,045 37,705,285 N/A Kitchen cabinets 25,164,734 22,554,829 5 - 10years Carpets 22,646,500 19,665,364 5 - 10years Air conditioning 500,000 500,000 5 - 10years Laundry equipment 144,608 129,450 5 - 7 years Elevators 1,885,265 1,885,265 20 - 40years Swimming pools 1,090,604 1,090,604 10 - 30years Equipment 27,626,582 23,450,788 5 - 30years Motor vehicles 217,080 203,009 5 years Fences 158,029 147,000 5 - 15years Furniture and fixtures 20,899,877 18,293,250 5 - 7 years Total fixed assets 660,338,209 656,002,390 Less: Accumulated depreciation (208,192,194) (194,614,338) $452,146,015 $ 461,388,052 NOTE 3. RELATED PARTY TRANSACTIONS The Partnership’s properties are managed by The Hamilton Company, Inc. (the “Management Company”), an entity that is owned by the majority shareholders of NewReal, Inc., the general partner of the Partnership (the “General Partner”). The management fee is equal to 4% of gross receipts of rental revenue and laundry income on the majority of the Partnership’s properties and 2% on Linewt and 3% on Hill Estates. Total fees paid were approximately $1,843,000 and $1,653,000 for the six months ended June 30, 2026 and 2025, respectively. The Partnership Agreement permits the General Partner or the Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2026 and 2025, approximately $559,000 and $417,000 respectively, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of
Page 18
13
Page 19
Table of Contents 14 the 2026 expenses referred to above, approximately $75,000 consisted of repairs and maintenance and $160,000 for administrative expense. Approximately $324,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2026, the Hamilton Company received approximately $478,000 from the Investment Properties of which approximately $385,000 was the management fee, approximately $55,000 for construction, architectural services, and supervision of capital projects, approximately $28,000 for repairs and maintenance, and approximately $10,000 for legal expense. The management fee is equal to 4% of gross receipts of rental income on the majority of the investment properties, and 2% on Dexter Park. The Partnership reimburses the Management Company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,570,000 and $2,255,000 for the six months ended June 30, 2026 and 2025, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. For the six months ended June 30, 2026, the Partnership incurred $38,000 for the employer’s match portion to the plan. For the six months ended June 30, 2025, the Partnership incurred $32,000 for the employer’s match portion to the plan. Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of 16 people. During the six months ended June 30, 2026 and 2025 the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above. Sally Michael is a Director of New Real, Inc., and she is a Partner at Saul Ewing LLP. Saul Ewing billed the Partnership for legal fees totaling approximately $111,000 and $275,000 for the six months ended June 30, 2026 and 2025, respectively. David Reier is a Director of New Real, Inc., who billed the Partnership approximately $10,000 and $6,000 for legal fees for the six months ended June 30, 2026 and 2025, respectively. The Partnership has invested in seven 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 Brown family related entities, and five current and previous employees of the Management Company. The Brown Family related entities’ ownership interest was between 47.6% and 59%. See Note 15 for a description of the properties and their operations. NOTE 4. PREPAID EXPENSES and OTHER ASSETS Approximately $3,669,000, and $3,593,000 of security deposits are included in prepaid expenses and other assets at June 30, 2026 and December 31, 2025, respectively. Also, included in prepaid expenses and other assets at June 30, 2026 and December 31, 2025 is approximately $2,450,000 and $2,158,000, respectively, held in escrow to fund future capital improvements. Intangible assets on the acquisition of rental properties are included in prepaid expenses and other assets. Intangible assets are approximately $260,000 and $2,692,000 net of accumulated amortization of approximately $6,308,000 and $3,876,000 at June 30, 2026, and at December 31, 2025, respectively. Financing fees in association with the line of credit of approximately $105,000 and $142,000 are net of accumulated amortization of approximately $121,000 and $83,000 at June 30, 2026, and December 31, 2025, respectively. NOTE 5. MORTGAGE NOTES PAYABLE At June 30, 2026 and December 31, 2025, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2,with interest rates ranging from 2.97% to 5.99%, payable in monthly installments aggregating approximately $2,148,000 including principal, to various dates through 2035. The majority of the mortgages are subject to prepayment penalties. At June 30, 2026, the weighted average interest rate on the above mortgages was 4.2%. The effective rate of 4.3% 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
Page 21
Table of Contents 15 joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations. Financing fees of approximately $3,156,000 and $3,434,000 are net of accumulated amortization of approximately $2,366,000 and $2,088,000 at June 30, 2026 and December 31, 2025, respectively, which offset the total mortgage notes payable. The Partnership has pledged tenant leases as additional collateral for certain of these loans. On May 30, 2025, the Partnership borrowed $18,664,000 at a fixed interest rate of 5.84%. Proceeds were used to refinance the existing mortgage on Hamilton Highlands. Also on May 30, 2025, the Partnership borrowed an additional $40,000,000 at a fixed rate of 5.99%. Proceeds were subsequently used for the purchase of Hill Estates. Both advances were made from the existing Master Credit Facility, as amended, with KeyBank. On June 18, 2025, the Partnership entered into an interim loan agreement with KeyBank for $67,500,000 at a floating interest rate of the SOFR rate plus 150 basis points. Proceeds of the loan were used for the purchase of Hill Estates. The loan was refinanced on December 30, 2025. The refinanced loan for $67,656,000 is interest only at a rate of 5.19%, and a maturity date of December 30, 2035. On July 10, 2025, the Partnership borrowed an additional $682,520 from Brookline Bank as an earnout in connection with the loan at Staples Plaza. The earnout tranche bears an interest rate of 5.97%, is coterminous with the original underlying loan, and amortizes on a 30-year schedule. Approximate annual maturities at June 30, 2026 are as follows: 2027—current maturities $ 6,605,000 2028 40,652,000 2029 58,337,000 2030 21,582,000 2031 862,000 Thereafter 401,363,000 529,401,000 Less: unamortized deferred financing costs 3,156,000 $526,245,000 Line of Credit On November 21, 2024, the Partnership entered into an agreement with Brookline Bank for a $25,000,000 revolving line of credit. The term of the line is three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a minimum debt yield of 8.5%. The Partnership incurred a commitment fee of $125,000. The Partnership will be charged annually an unused line fee, equal to seventy-five basis points (0.75%) of the difference between the maximum availability and the outstanding principal of the line of credit. This fee is waived for any period in which the Partnership maintains aggregate deposits of twenty million dollars with the Lender. As of June 30, 2026, the Partnership was in compliance with the financial covenants. 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 percentages of the Partnership’s ownership interest in 29 of its Subsidiary Partnerships. Pledged interests are 49% of the Partnership’s ownership interest in the respective entities.
Page 22
Table of Contents 16 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 June 30, 2026, amounts received for prepaid rents of approximately $4,750,000 are included in cash and cash equivalents, and security deposits of approximately $3,669,000 are included in prepaid expenses and other assets and are restricted cash. NOTE 7. PARTNERS’ CAPITAL The Partnership has two classes of Limited Partners (Class A and B) and one 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 distributions made to the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests. In March 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), for a total payment of $1,394,763, on March 31, 2026. On May 7, 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), for a total payment of $1,387,678 on June 30, 2026. Total distributions to date through June 30, 2026 total $2,782,441. In 2025, the Partnership paid an aggregate distribution of $144.00 per Unit ($4.80 per Receipt) for a total payment of $16,793,527. 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: Six Months Ended June 30, 2026 2025 Net (Loss) Income per Depositary Receipt $ (1.45) $ 2.27 Distributions per Depositary Receipt $ 0.80 $ 4.00 NOTE 8. TREASURY UNITS Treasury Units at June 30, 2026 are as follows: Class A 51,681 Class B 12,274 General Partnership 646 64,601 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. The Repurchase Program required the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. On March 12, 2025, the Board of Directors authorized the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written trading plan that complies with the requirements of Rule 10b5-1, Depositary Receipts and Partnership Units in such quantities, at such prices, in such manner and on such terms and conditions as the Authorized Persons determine are in the best interests of the Partnership; provided, however, that (i) the aggregate cost of Depositary Receipts and
Page 24
Table of Contents 17 Partnership Units repurchased shall not exceed $5 million, (ii) no Depositary Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date of the plan, (iii) no Depositary Receipt shall be repurchased in excess of $95 per depositary receipt ( the “Repurchase Plan”). The Repurchase Plan requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership Agreement. The Repurchase Plan shall be made in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be made in accordance with all applicable laws and regulations in effect from time to time. On March 11, 2026, the General Partner authorized the President and Treasurer to renew the Repurchase Plan for one year. From August 20, 2007 through June 30, 2026, the Partnership has repurchased 1,575,610 Depositary Receipts at an average price of $32.36 per receipt (or $970.80) per underlying Class A Unit), 4,737 Class B Units and 249 General Partnership Units, both at an average price of $1,317 per Unit, totaling approximately $58,152,000 including brokerage fees paid by the Partnership. During the six months ended June 30, 2026, the Partnership purchased a total of 16,201 Depositary Receipts. The average price was $61.29 per receipt, or $1,838.70 per unit. The cost including commission was approximately $993,000. The partnership was required to repurchase 128.3 Class B Units and 6.8 General Partnership units at a cost of $235,483 and $12,394, respectively. NOTE 9. COMMITMENTS AND CONTINGENCIES The Partnership, the Subsidiary Partnerships, and the Investment Properties and their properties are not presently subject to any material litigation, and, to management’s knowledge, there is not any material litigation presently threatened against them. The properties are occasionally subject to ordinary routine legal and administrative proceedings incident to the ownership of residential and commercial real estate. Some of the legal and other expenses related to these proceedings are covered by insurance and none of these costs and expenses are expected to have a material adverse effect on the Consolidated Financial Statements of the Partnership. NOTE 10. RENTAL INCOME During the six months ended June 30, 2026, approximately 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 August. Approximately 5% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2026 as follows: Commercial Property Leases 2027 $ 3,591,782 2028 3,052,786 2029 2,398,421 2030 1,784,330 2031 1,606,449 Thereafter 6,729,599 $ 19,163,367 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 $556,000 and $466,000 for the six months ended June 30, 2026 and 2025 respectively. Trader Joe’s and Blue Pearl, a tenant at 653 Worcester Road, Framingham, Massachusetts, are approximately 35% of the total commercial rental income.
Page 25
Table of Contents 18 The following information is provided for commercial leases: 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 2027 $ 691,960 39,405 30 17 % 2028 555,645 15,016 10 14 % 2029 488,181 12,433 8 12 % 2030 541,212 18,405 8 13 % 2031 72,900 1,800 1 2 % 2032 27,874 724 1 1 % 2033 110,600 1,106 1 3 % 2034 533,784 20,897 2 13 % 2035 — — — —% 2036 459,743 15,400 1 11 % Thereafter 543,503 12,401 3 14 % Totals $4,025,402 137,587 65 100 % Rents receivable are net of an allowance for doubtful accounts of approximately $777,000 and $879,000 at June 30, 2026 and December 31, 2025. Included in rents receivable at June 30, 2026 is approximately $22,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. NOTE 11. CASH FLOW INFORMATION During the six months ended June 30, 2026 and 2025, cash paid for interest was approximately $10,893,000, and $7,323,000, respectively. Cash paid for state income taxes was approximately $47,000 and $127,000 during the six months ended June 30, 2026 and 2025, respectively. In 2025, the Partnership acquired construction in progress through accounts payable and accruals, which represented a non-cash investing activity of approximately $2,309,000. Interest capitalized amounted to approximately $360,000 for the six months ended June 30, 2025. There was no interest expense capitalized for the six months ended June 30, 2026. NOTE 12. FAIR VALUE MEASUREMENTS Fair Value Measurements on a Recurring Basis At June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items. At June 30, 2026 and December 31, 2025 we estimated the fair value of our mortgage payable, derivative financial instrument, and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at June 30, 2026 and December 31, 2025, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so. At June 30, 2026 and at December 31, 2025, the Partnership’s line of credit had an outstanding balance of zero.
Page 27
Table of Contents 19 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. June 30, 2026 Dec 31, 2025 Carrying Value Fair Value Carrying Value Fair Value Assets Cash equivalents 24,749,739 24,749,739 26,668,978 26,668,978 Total Assets 24,749,739 24,749,739 26,668,978 26,668,978 Liabilities Mortgage payable * - Partnership properties 526,244,604 481,756,903 527,596,824 488,368,589 - Investment properties 174,132,800 167,622,032 174,200,747 169,130,067 Total Liabilities 700,377,404 649,378,935 701,797,571 657,498,656 * Net of unamortized deferred financing costs Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2026 and December 31, 2025. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2026 and current estimates of fair value may differ significantly from the amounts presented herein. NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS Cash Flow Hedges of Interest Rate Risk The Partnership’s objectives in using rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Partnership uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Partnership making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Partnership’s variable rate debt. During the next 12 months, the Partnership estimates approximately $57,000 will be reclassified as a decrease to interest expense. As of June 30, 2026, the Partnership had one interest rate swap outstanding with a notional amount of approximately $294,000 designated as cash flow hedges of interest rate risk. As of June 30, 2026, the Partnership did not have any interest rate derivatives in a net liability position.
Page 28
Table of Contents 20 The table below presents the fair value of the Partnership’s derivative financial instruments, as well as their classification on the consolidated balance sheets as of June 30, 2026 and December 31, 2025. Fair Value Asset Derivatives designated June 30, December 31, as hedging instruments 2026 2025 Balance sheet location Interest rate swaps $ 293,810 $ 210,740 Prepaid Expenses and Other Assets The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended June 30, 2026 and 2025. Location of Gain or (Loss) Amount of Gain Total Amount of Reclassified or (Loss) Location of Gain Interest Expense Amount of Gain from Reclassified or (Loss) Recognized presented in the Derivatives in Cash Flow or (Loss) Recognized Accumulated from Accumulated in Income on consolidated statements Hedging Relationships in OCI on Derivative OCI Into Income OCI into Income Derivative of operations Three Months Ended June 30, 2026 2025 2026 2025 2026 2025 Interest rate swaps $ 58,364 $ (64,024) Interest expense $ — $ — Interest and other investment income (loss) $ (5,731,689) $(4,136,156) Six Months Ended June 30, Interest rate swaps $ 83,070 $ (193,914) Interest expense $ — $ — Interest and other investment income (loss) $(11,444,016) $(7,927,588) NOTE 14. 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, different depreciation methods, different tax lives, other items with limited tax deductibility carryovers and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Federal taxable income of approximately $5,081,000 was approximately $950,000 less than statement income for the year ended December 31, 2025. The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2025 is approximately $17,000,000 less than the statement basis. The primary reasons for the difference in tax basis are tax free exchanges, accelerated depreciation, bonus depreciation, and other timing differences. The Partnership’s Federal tax basis in its joint venture investments is approximately $1,000,000 less than statement basis. State taxable income may be significantly different due to different tax treatments for certain items. Substantial acquisitions placed in service could significantly change federal taxable income. 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 consolidated financial statements. 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 June 30, 2026, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2022 forward. NOTE 15. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are the Brown Family related entities and five current and former employees of the Management Company. The Brown Family’s ownership
Page 30
Table of Contents interest was between 47.6% and 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 original mortgage was $89,914,000 with an interest rate of 5.57% and was to mature in 2019. The mortgage 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 continue to account for the investment using the equity method of accounting, although the Partnership has no legal obligation to fund its’ share of any future operating deficiencies as needed. At June 30, 2026, the balance on this mortgage before unamortized deferred financing costs is $125,000,000. On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, one 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 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. On September 30, 2025, the property was refinanced with a 10 year mortgage in the amount of $12,214,000 at a fixed rate of 5.610% interest only. The Joint Venture paid off the prior mortgage of approximately $10,000,000 with the proceeds of the new mortgage and held the remaining $2,210,000 at the property as cash reserves. The costs associated with the refinancing were approximately $170,000. 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, 2026, the balance on this mortgage before unamortized deferred financing costs is $12,214,000. 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. On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Joint Venture sold 127 of the units as condominiums and retained 49 units for long-term investment. The Joint Venture obtained a new 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. After paying off the mortgage, the Partnership began to sell off the individual units. In 2019, all residential units were sold. The Partnership still owns 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 apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. On September 12,
Page 31
21
Page 32
Table of Contents 22 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was approximately $123,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. At June 30, 2026, the balance on this mortgage before unamortized deferred financing costs is $6,000,000. 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 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 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 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000. On April 18, 2024 the Borrower and KeyBank executed amended loan documents reflecting the transfer of interest in the Borrower. In conjunction with the execution of the amended loan documents, KeyBank provided a courtesy reduction equal to 50% of the transfer fee. In August 2024, the property was refinanced with a 10 year mortgage in the amount of $23,589,000 at 5.425% interest only. The Joint Venture paid off the prior mortgage of approximately $16,900,000 with the proceeds of the new mortgage and distributed $2,000,000 to the Partnership. The costs associated with the refinancing were approximately $243,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. At June 30, 2026, the balance of the mortgage before unamortized deferred finance is $23,589,000. The investment is referred to as Hamilton on Main LLC. In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. 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 June 30, 2026, the balance of this mortgage before unamortized deferred financing costs is approximately $7,865,000. This investment is referred to as 345 Franklin, LLC. Summary financial information at June 30, 2026 Hamilton Hamilton Hamilton Hamilton Essex 345 HamiltonMinuteman on Main Dexter Essex 81 Development Franklin 1025 Apts Apts Park Total ASSETS Rental Properties $ 5,700,858 $ 2,577,382 $ 3,699,439 $ 66,867 $ 3,782,504 $ 12,731,811 $ 67,822,407$ 96,381,268 Cash & Cash Equivalents 1,531,128 83,862 42,503 15,268 814,202 650,913 8,740,725 11,878,601 Rent Receivable 117,151 51,233 12,081 3,582 19,369 42,082 182,606 428,104 Real Estate Tax Escrow 21,194 — 28,654 — 34,362 — — 84,210 Prepaid Expenses & Other Assets 205,496 23,323 110,117 1,266 85,374 456,151 2,523,237 3,404,964 Total Assets $ 7,575,827 $ 2,735,800 $ 3,892,794 $ 86,983 $ 4,735,811 $ 13,880,957$ 79,268,975$112,177,147 LIABILITIES AND PARTNERS’ CAPITAL Mortgage Notes Payable $12,056,780$ — $ 7,851,916 $ — $ 5,957,377 $ 23,390,587$124,876,139$174,132,799 Accounts Payable & Accrued Expense 126,432 2,000 71,556 2,174 57,156 227,112 782,374 1,268,804 Advance Rental Pmts & Security Deposits 466,024 — 364,819 9,027 161,802 556,329 3,964,060 5,522,061 Total Liabilities 12,649,236 2,000 8,288,291 11,201 6,176,335 24,174,028 129,622,573 180,923,664 Partners’ Capital (5,073,409) 2,733,800 (4,395,497) 75,782 (1,440,524) (10,293,071) (50,353,598) (68,746,517) Total Liabilities and Capital $ 7,575,827 $ 2,735,800 $ 3,892,794 $ 86,983 $ 4,735,811 $ 13,880,957$ 79,268,975$112,177,147 Partners’ Capital %—NERA 50% 50% 50% 50% 50% 50% 40% Investment in Unconsolidated Joint Ventures $ — $ 1,366,900 $ — $ 37,891 $ — $ — $ — 1,404,791 Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures $(2,536,705) $ — $(2,197,749) $ — $ (720,262) $ (5,146,536) $(20,141,439) (30,742,690) Total Investment in Unconsolidated Joint Ventures (Net) $(29,337,899) Total units/condominiums Apartments 49 — 40 — 42 148 409 688 Commercial 1 1 — 1 — — — 3 Total 50 1 40 1 42 148 409 691
Page 33
Table of Contents 23 Financial information for the six months ended June 30, 2026 Hamilton Hamilton Hamilton Hamilton Essex 345 Hamilton Minuteman on Main Dexter Essex 81 DevelopmentFranklin 1025 Apts Apts Park Total Revenues Rental Income $1,015,970$ 121,806 $ 913,479 $ 55,879 $ 767,885 $2,177,942$ 9,153,462$14,206,423 Laundry and Sundry Income 7,504 — 23 — — 28,387 95,928 131,842 1,023,474 121,806 913,502 55,879 767,885 2,206,329 9,249,390 14,338,265 Expenses Administrative 12,996 12,293 22,389 2,522 9,245 42,860 112,685 214,990 Depreciation and Amortization 230,879 5,440 176,692 1,632 176,974 617,299 1,873,807 3,082,723 Management Fees 42,564 5,158 37,912 2,164 30,334 85,388 180,987 384,507 Operating 145,019 — 80,969 224 114,903 333,988 863,355 1,538,458 Renting 21,523 — 17,863 65 9,170 48,648 56,309 153,578 Repairs and Maintenance 104,914 1,000 53,258 — 80,501 379,416 716,665 1,335,754 Taxes and Insurance 154,400 41,539 100,426 11,159 95,288 286,391 1,398,375 2,087,578 712,295 65,430 489,509 17,766 516,415 1,793,990 5,202,183 8,797,588 Income Before Other Income 311,179 56,376 423,993 38,113 251,470 412,339 4,047,207 5,540,677 Other Income (Loss) Interest Expense (354,518) — (158,192) — (116,666) (658,942) (2,526,062) (3,814,380) Interest Income 20,450 495 2,846 256 7,910 9,645 95,527 137,129 (334,068) 495 (155,346) 256 (108,756) (649,297) (2,430,535) (3,677,251) Net (Loss) Income $ (22,889) $ 56,871 $ 268,647 $ 38,369 $ 142,714 $ (236,958) $ 1,616,674$ 1,863,426 Net (Loss) Income —NERA 50% $ (11,445) $ 28,435 $ 134,323 $ 19,185 $ 71,357 $ (118,478) 123,376 Net Income —NERA 40% $ 646,670 646,670 $ 770,046
Page 34
Table of Contents 24 Financial information for the three months ended June 30, 2026 Hamilton Hamilton Hamilton Hamilton Essex 345 Hamilton Minuteman on Main Dexter Essex 81 DevelopmentFranklin 1025 Apts Apts Park Total Revenues Rental Income $ 509,505 $ 61,335 $ 451,465 $ 28,745 $ 407,634 $ 1,108,211 $ 4,580,809$ 7,147,704 Laundry and Sundry Income 3,798 — 23 — — 15,171 53,849 72,841 513,303 61,335 451,488 28,745 407,634 1,123,382 4,634,658 7,220,545 Expenses Administrative 9,194 8,088 13,139 1,496 5,579 21,146 57,850 116,492 Depreciation and Amortization 115,298 2,720 88,388 816 88,789 309,851 939,187 1,545,049 Management Fees 21,435 2,579 19,066 1,114 16,094 42,972 90,140 193,400 Operating 60,717 — 26,655 159 33,977 152,085 346,989 620,582 Renting 18,448 — 16,833 32 6,270 39,825 29,574 110,982 Repairs and Maintenance 61,437 1,000 27,519 — 37,245 193,159 404,983 725,343 Taxes and Insurance 76,783 20,791 50,207 5,425 48,014 155,333 700,350 1,056,903 363,312 35,178 241,807 9,042 235,968 914,371 2,569,073 4,368,751 Income Before Other Income 149,991 26,157 209,681 19,703 171,666 209,011 2,065,585 2,851,794 Other Income (Loss) Interest Expense (177,581) — (78,153) — (58,342) (329,740) (1,259,376) (1,903,192) Interest Income 10,297 200 1,553 150 4,326 5,250 55,443 77,219 (167,284) 200 (76,600) 150 (54,016) (324,490) (1,203,933) (1,825,973) Net Income (Loss) $ (17,293) $ 26,357 $ 133,081 $ 19,853 $ 117,650 $ (115,479) $ 861,652 $ 1,025,821 Net Income (Loss)—NERA 50% $ (8,646) $ 13,179 $ 66,540 $ 9,926 $ 58,824 $ (57,739) 82,084 Net Income —NERA 40% $ 344,660 344,660 $ 426,744
Page 35
Table of Contents 25 Future annual mortgage maturities at June 30, 2026 are as follows: At June 30, 2026, the weighted average interest rate on the above mortgages was 4.3%. The effective rate was 4.4% including the amortization expense of deferred financing costs Hamilton 345 Hamilton Hamilton on Dexter Period End Essex 81 Franklin Minuteman Main Apts Park Total 6/30/2027 $ — 264,211 $ — $ $ — $ 264,211 6/30/2028 — 274,619 — — 125,000,000 125,274,619 6/30/2029 — 7,326,403 — — — 7,326,403 6/30/2030 — — — — — — 6/30/2031 — — — — — — Thereafter 12,214,000 — 6,000,000 23,589,000 — 41,803,000 12,214,000 7,865,233 6,000,000 23,589,000 125,000,000 174,668,233 Less: unamortized deferred financing costs (157,220) (13,317) (42,623) (198,413) (123,861) (535,434) $12,056,780 $7,851,916 $5,957,377 $23,390,587 $124,876,139 $174,132,799
Page 36
Table of Contents 26 Summary financial information at June 30, 2025 Hamilton Hamilton Hamilton Hamilton Essex 345 Hamilton Minuteman on Main Dexter Essex 81 Development Franklin 1025 Apts Apts Park Total ASSETS Rental Properties $ 5,065,184 $ 2,579,456 $ 4,010,711 $ 70,131 $ 3,847,684 $13,180,990$ 69,605,017$ 98,359,173 Cash & Cash Equivalents 1,364,311 67,004 65,073 14,483 479,150 588,855 5,210,740 7,789,616 Rent Receivable 197,025 65,560 15,696 — 3,888 36,070 149,279 467,518 Real Estate Tax Escrow 68,876 — 43,268 — 32,079 — — 144,223 Prepaid Expenses & Other Assets 306,479 29,207 61,802 7 54,603 299,310 2,941,014 3,692,422 Total Assets $ 7,001,875 $ 2,741,227 $ 4,196,550 $ 84,621 $ 4,417,404 $14,105,225$ 77,906,050$110,452,952 LIABILITIES AND PARTNERS’ CAPITAL Mortgage Notes Payable $ 9,996,553 $ — $ 8,099,455 $ — $ 5,949,194 $23,366,292$124,811,515 $172,223,009 Accounts Payable & Accrued Expense 282,111 6,311 64,117 1,977 55,030 240,187 793,185 1,442,918 Advance Rental Pmts& Security Deposits 369,428 — 258,189 — 179,124 483,952 4,055,646 5,346,339 Total Liabilities 10,648,092 6,311 8,421,761 1,977 6,183,348 24,090,431 129,660,346 179,012,266 Partners’ Capital (3,646,217) 2,734,916 (4,225,211) 82,644 (1,765,944) (9,985,206) (51,754,296) (68,559,314) Total Liabilities and Capital $ 7,001,875 $ 2,741,227 $ 4,196,550 $ 84,621 4,417,404 $14,105,225$ 77,906,050$110,452,952 Partners’ Capital %—NERA 50% 50% 50% 50% 50% 50% 40% Investment in Unconsolidated Joint Ventures $ — $ 1,367,458 $ — $ 41,322 $ $ $ $ 1,408,780 Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures $(1,823,109) $ — $(2,112,606) $ — $ (882,972) $(4,992,603) $(20,701,718) (30,513,007) Total Investment in Unconsolidated Joint Ventures (Net) $(29,104,227) Total units/condominiums Apartments 48 — 40 0 42 148 409 687 Commercial 1 1 — 1 — — — 3 Total 49 1 40 1 42 148 409 690
Page 37
Table of Contents 27 Financial information for the six months ended June 30, 2025 Hamilton Hamilton Hamilton Hamilton Essex 345 Hamilton Minuteman on Main DexterEssex 81 Development Franklin 1025 Apts Apts Park Total RevenuesRental Income $ 998,349 $ 120,942 $ 960,298 $ 49,835 $ 743,084 $ 2,176,046 $ 8,932,174 $13,980,728Laundry and SundryIncome 5,091 — — — — 29,211 93,984 128,286 1,003,440 120,942 960,298 49,835 743,084 2,205,257 9,026,158 14,109,014Expenses Administrative 15,191 2,011 21,560 2,876 16,369 48,363 143,595 249,965Depreciation andAmortization 231,944 5,855 174,660 1,632 170,946 573,175 1,823,872 2,982,084Management Fees 39,691 5,058 36,692 2,060 29,578 86,031 186,390 385,500Operating 172,413 — 67,248 59 80,485 290,502 734,048 1,344,755Renting 10,217 — 36,277 68 9,267 54,477 47,216 157,522Repairs and Maintenance 84,844 — 68,790 — 61,422 295,861 737,244 1,248,161Taxes and Insurance 148,755 34,773 95,999 9,737 80,492 240,454 1,429,725 2,039,935 703,055 47,697 501,226 16,432 448,559 1,588,863 5,102,090 8,407,922Income Before Other Income 300,385 73,245 459,072 33,403 294,525 616,394 3,924,068 5,701,092Other Income (Loss)Interest Expense (344,358) — (164,862) — (117,222) (660,946) (2,539,706) (3,827,094)Interest Income 19,472 682 3,897 288 4,960 8,821 75,139 113,259Other income (Expense) — — — — — (324,886) 682 (160,965) 288 (112,262) (652,125) (2,464,567) (3,713,835)Net Income (Loss) $ (24,501) $ 73,927 $ 298,107 $ 33,691 $ 182,263 $ (35,731) $ 1,459,501 $ 1,987,257 Net Income (Loss)—NERA 50% $ (12,250) $ 36,964 $ 149,053 $ 16,845 $ 91,132 $ (17,866) 263,878Net Income —NERA 40% $ 583,801 583,801 $ 847,679
Page 38
Table of Contents 28 Financial information for the three months ended June 30, 2025 Hamilton Hamilton Hamilton Hamilton Essex 345 Hamilton Minuteman on Main DexterEssex 81 Development Franklin 1025 Apts Apts Park Total RevenuesRental Income $ 493,808 $ 60,471 $ 457,180 $ 24,918 $ 375,471 $ 1,070,467 $ 4,484,108 $ 6,966,423Laundry and SundryIncome 2,734 — — — — 14,146 53,836 70,716 496,542 60,471 457,180 24,918 375,471 1,084,613 4,537,944 7,037,139Expenses Administrative 6,235 1,005 7,594 2,050 5,014 8,170 57,263 87,331Depreciation andAmortization 116,036 2,928 87,631 816 86,129 287,273 918,654 1,499,467Management Fees 19,403 2,529 17,629 1,030 15,298 43,065 93,045 191,999Operating 74,151 — 28,420 59 23,121 102,489 294,692 522,932Renting 9,998 — 5,537 48 3,801 22,273 22,669 64,326Repairs and Maintenance 42,911 — 33,958 — 38,645 149,182 395,626 660,322Taxes and Insurance 74,563 17,423 47,993 5,024 40,525 120,874 713,322 1,019,724 343,297 23,885 228,762 9,027 212,533 733,326 2,495,271 4,046,101Income Before Other Income 153,245 36,586 228,418 15,891 162,938 351,287 2,042,673 2,991,038Other Income (Loss) Interest Expense (173,048) — (82,376) — (58,927) (332,246) (1,273,633) (1,920,230)Interest Income 9,620 341 1,867 133 2,775 3,693 43,337 61,766 (163,428) 341 (80,509) 133 (56,152) (328,553) (1,230,296) (1,858,464)Net Income (Loss) $ (10,183) $ 36,927 $147,909 $ 16,024 $ 106,786 $ 22,734 $ 812,377 $ 1,132,574 Net Income (Loss)—NERA 50% $ (5,092) $ 18,464 $ 73,955 $ 8,012 $ 53,393 $ 11,368 160,100Net Income —NERA 40% $ 324,952 324,952 $ 485,051
Page 39
Table of Contents NOTE 16. EMPLOYEE BENEFIT 401(k) PLANS 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. The Partnership matches 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, 2026 was $38,000. NOTE 17. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS In November 2024, the Financial Accounting Standards Board (“FASB”) issued a new standard on disaggregation of income statement expenses, which requires an entity to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in a tabular format in the notes to the financial statements. The standard will be effective for annual reporting periods beginning after December 15, 2026 and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Partnership is currently evaluating the impact of the new rules on its disclosures. NOTE 18. SEGMENT REPORTING Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”). The CODM determines how resources should be allocated and assesses performance on a regular basis. The Partnership’s CODM is the Partnership’s Treasurer and Director. The Partnership operates as a single business segment, focusing on the ownership, operation and development of its multifamily and commercial real estate portfolio located in the city of Boston, surrounding suburbs, and southern New Hampshire. For a description of the types of products and services from which this single reportable segment derives its revenues, see Notes 1 and 2. The CODM is regularly provided with financial reporting packages which include the financial statements presented herein. The CODM evaluates the performance of the Partnership on a consolidated basis, based upon consolidated Income Before Other Income (Expense), to make decisions about the Partnership’s operations and resource allocation. Consolidated Income Before Other Income (Expense) is used to monitor budget versus actual results. The significant expenses of the Partnership are presented within the Consolidated Statements of Income. The CODM manages our portfolio as a whole and decisions regarding investments are made collectively based on the inputs above. Accordingly, the Partnership consists of a single operating and reportable segment and the consolidated financial statements and notes thereto are presented as a single reportable segment. Since the Partnership operates in a single segment, the segment information is consistent with the consolidated statements of operations and comprehensive income (loss). Therefore, no reconciliation is necessary. NOTE 19. SUBSEQUENT EVENTS On July 31, 2026, the Partnership paid down the outstanding loan balance of Hamilton Battlegreen of approximately $3.4 million. The Partnership is currently in the process of refinancing the loan. On August 6, 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on September 30, 2026. From July 1, 2026 through August 6, 2026, the Partnership has purchased 724 Depository Receipts.
Page 40
29
Page 41
Table of Contents 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 Litigation 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 2026 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. For an additional discussion of factors that may affect the Partnership’s business and results of operations, see Item1A-Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Overview 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 may be 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 August 1, 2026 was 2.7% as compared with a vacancy rate of 2.4% as of August 1, 2025. The vacancy rate for the Joint Venture properties as of August 1, 2026 was 3.9%, as compared to 1.9% for the same period last year. The Boston area rental market is currently experiencing elevated vacancy rates, and NERA has responded aggressively to keep vacancy below the Boston area’s current availability rates. Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the year. During the second quarter of 2026, rents increased an average of 2.9% for renewals and decreased an average of 1.2% for new leases. For the balance of 2026, management expects a rental market with slowing rent growth. For the second quarter of 2026, consolidated revenue, excluding Hill Estates, two sold commercial properties, and Mill Street Heights (newly constructed property), increased by 0.3%, operating expenses increased by 9.8%, and Income before Other Income (Expense) decreased by 17.3%, as compared to the second quarter of 2025. On November 21, 2024, the Partnership entered into an agreement with Brookline Bank for a new $25,000,000 revolving line of credit. The term of the line is for three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a minimum debt yield of 8.5%. The Partnership incurred a commitment fee of $125,000. The Partnership will be charged annually an unused line fee, equal to seventy-five basis points (0.75%) between the difference of the maximum availability and the outstanding principal of the line of credit. This fee will be waived for any period in which the Partnership maintains aggregate deposits of twenty million dollars with the Lender. As of June 30, 2026, the Partnership was in compliance with the financial covenants. From the start of the Stock Repurchase Program in 2007 through June 30, 2026, the Partnership has purchased 1,575,610 Depositary Receipts. During the six months ended June 30, 2026, the Partnership purchased a total of 16,201 Depositary Receipts.
Page 42
30
Page 43
Table of Contents 31 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. 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 six months ended June 30, 2026, tenant renewals were approximately 75% with an average rental increase of approximately 3.4%, new leases accounted for approximately 25% with a rental rate decrease of approximately 3.1%. During the six months ended June 30, 2026, leasing commissions were approximately $741,000 compared to approximately $316,000 for the six months ended June 30, 2025, an increase of approximately $425,000 (134.5%). Tenant concessions were approximately $42,000 for the six months ended June 30, 2026, compared to approximately $30,000 for the six months ended June 30, 2025, an increase of approximately $12,000 (40.0%). Tenant improvements were approximately $2,558,000 for the six months ended June 30, 2026, compared to approximately $1,779,000 for the six months ended June 30, 2025, an increase of approximately $779,000 (43.8%). Hamilton accounted for approximately 1.0% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2026 and 1.2% during the six months ended June 30, 2025. 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, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately $97,000 (20.1%) and approximately $41,000 (100%) of the legal services paid for by the Partnership during the six months ended June 30, 2026 and 2025, respectively. Additionally, as described in Note 3 to the consolidated financial statements, The Hamilton Company receives similar fees from the Investment Properties.
Page 44
Table of Contents 32 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 six months ended June 30, 2026, Hamilton provided the Partnership approximately $324,000 in construction and architectural services, compared to approximately $225,000 for the six months ended June 30, 2025. Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the six months ended June 30, 2026 and 2025, Hamilton charged the Partnership $62,500 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements. 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. Revenue from commercial leases also includes 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 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.
Page 46
Table of Contents 33 Rental Property Held 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 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 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.
Page 47
Table of Contents 34 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 analyses 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 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. 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.
Page 48
Table of Contents 35 RESULTS OF OPERATIONS Three Months Ended June 30, 2026 and June 30, 2025 The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, and other expense of approximately $4,040,000 during the three months ended June 30, 2026, compared to approximately $7,063,000 for the three months ended June 30, 2025, a decrease of approximately $3,023,000 (42.8%). The rental activity is summarized as follows: Occupancy Date August 1, 2026 August 1, 2025 Residential Units 3,430 3,358 Vacancies 92 79 Vacancy rate 2.68 % 2.35 % Commercial Total square feet 140,991 159,266 Vacancy 12,015 7,390 Vacancy rate 8.52 % 4.64 % Rental Income (in thousands) Three Months Ended June 30, 2026 2025 Total Continuing Total ContinuingOperations Operations Operations Operations Total rents $ 24,184 $ 24,184 $ 21,038 $ 21,038 Residential percentage 95 % 95 % 94 % 94 % Commercial percentage 5 % 5 % 6 % 6 % Contingent rentals $ 317 $ 317 $ 283 $ 283
Page 49
Table of Contents Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Three Months Ended June 30, Dollar Percent 2026 2025 Change Change Revenues Rental income $ 24,183,592 $ 21,037,991 $ 3,145,601 15.0% Laundry and sundry income 219,745 202,117 17,628 8.7% 24,403,337 21,240,108 3,163,229 14.9% Expenses Administrative 896,512 667,913 228,599 34.2% Depreciation and amortization 8,101,809 4,474,748 3,627,061 81.1% Management fee 927,604 834,431 93,173 11.2% Operating 2,254,725 1,704,150 550,575 32.3% Renting 576,817 256,198 320,619 125.1% Repairs and maintenance 4,164,444 3,481,815 682,629 19.6% Taxes and insurance 3,441,047 2,757,280 683,767 24.8% 20,362,958 14,176,535 6,186,423 43.6% Income Before Other Income (Expense) 4,040,379 7,063,573 (3,023,194) (42.8%) Other Income (Expense) Interest income 105,259 737,413 (632,154) (85.7%) Interest expense (5,731,689) (4,136,156) (1,595,533) 38.6% Income from investments in unconsolidated joint ventures 426,744 485,051 (58,307) (12.0%) (5,199,686) (2,913,692) (2,285,994) 78.5% Net (Loss) Income $ (1,159,307) $ 4,149,881 $ (5,309,188) (127.9%) Rental income for the three months ended June 30, 2026 was approximately $24,184,000, compared to approximately $21,038,000 for the three months ended June 30, 2025, an increase of approximately $3,146,000 (15.0%). Excluding net rental income from the Hill Estates, two sold commercial properties, and Mill Street Heights (newly constructed), of approximately $3,086,000, net rental income increased approximately $60,000 (0.3%). The Partnership properties with the largest increases in rental income include Hamilton Oaks, Clovelly Apartments, and WCB Associates, with increases of $75,000, $57,000, and $54,000, respectively, partially offset by decreases at 62 Boylston, and Mill Street Gardens of approximately $63,000 and $62,000, 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 June 30, 2026 were approximately $20,363,000 compared to approximately $14,177,000 for the three months ended June 30, 2025, an increase of approximately $6.186,000 (43.6%). Excluding expenses from the Hill Estates, two sold commercial properties, and Mill Street Heights (newly constructed) properties of approximately $4,861,000, operating expenses were approximately $14,801,000, an increase of approximately $1,325,000 (9.8%). The factors contributing to the increase are an increase in operating expenses of approximately $357,000 (21.5%), which included an increase in snow removal of approximately $184,000 (490.1%) and an increase in utility expenses of approximately $81,000 (6.5%), an increase in repairs and maintenance expenses of approximately $310,000 ( 9.0%), which include an increase in plumbing expenses of approximately $176,000 (72.1%) and an increase in HVAC repairs of approximately $88,000 (95.9%), and an increase in taxes and insurance of approximately $188,000 (7.0%). Depreciation and amortization expense increased approximately $3,627,000 (81.1%) of which approximately $3,495,000 of the expenses are associated with the recently purchased properties. Interest expense for the three months ended June 30, 2026 was approximately $5,732,000 compared to approximately $4,136,000 for the three months ended June 30, 2025, an increase of approximately $1,596,000 (38.6%). 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, the mortgages incurred upon the acquisition of Hill Estates, and the newly constructed property at Mill Street Heights.
Page 50
36 Interest and dividend income for the three months ended June 30, 2026 was approximately $105,000 compared to approximately $737,000 for the three months ended June 30, 2025, a decrease of approximately $632,000 (85.7%). The decrease in the interest income was due to the use of the Investment in U.S. Treasury bills to acquire the Hill Estates property in June of 2025.
Page 51
Table of Contents 37 At June 30, 2026, 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 $427,000 for the three months ended June 30, 2026, compared to net income of approximately $485,000 for the three months ended June 30, 2025. Included in the income for the three months ended June 30, 2026 is depreciation and amortization expense of approximately $679,000. As a result of the changes discussed above, there was a net loss for the three months ended June 30, 2026 of approximately $1,159,000 compared to net income of approximately $4,150,000 for the three months ended June 30, 2025, a decrease in income of approximately $5,309,000 (127.9%).
Page 52
Table of Contents Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Six Months Ended June 30, Dollar Percent 2026 2025 Change Change Revenues Rental income $ 48,140,056 $ 41,534,111 $ 6,605,945 15.9% Laundry and sundry income 424,408 394,891 29,517 7.5% 48,564,464 41,929,002 6,635,462 15.8% Expenses Administrative 2,285,818 1,289,179 996,639 77.3% Depreciation and amortization 16,067,020 8,379,730 7,687,290 91.7% Management fee 1,843,423 1,652,840 190,583 11.5% Operating 7,438,544 4,982,524 2,456,020 49.3% Renting 1,033,157 534,527 498,630 93.3% Repairs and maintenance 7,465,529 6,340,084 1,125,445 17.8% Taxes and insurance 6,894,413 5,453,097 1,441,316 26.4% 43,027,904 28,631,981 14,395,923 50.3% Income Before Other Income ( Expense) 5,536,560 13,297,021 (7,760,461) (58.4)% Other Income (Expense) Interest income 221,393 1,728,487 (1,507,094) (87.2%) Interest (expense) (11,444,016) (7,927,588) (3,516,428) 44.4% Income from investments in unconsolidated joint ventures 770,046 847,679 (77,633) (9.2%) (Loss) on Sale of Real Estate (150,963) — (150,963) (10,603,540) (5,351,422) (5,252,118) 98.1% Net ( Loss) Income $ (5,066,980) $ 7,945,599 $ (13,012,579) (163.8%) Rental income for the six months ended June 30, 2026 was approximately $48,140,000, compared to approximately $41,534,000 for the six months ended June 30, 2025, an increase of approximately $6,606,000 (15.9%). Excluding net rental income from the Hill Estates, two sold commercial properties, and Mill Street Heights (newly constructed), of approximately $6,171,000, net rental income increased approximately $435,000 (1.1%). Included in rental income is contingent rentals collected on commercial properties. The Partnership properties with the largest increases in rental income include 62 Boylston, Hamilton Oaks, WCB Associates, and River Drive, with increases of $182,000, $147,000, $121,000, and $81,000 respectively, partially offset by decreases at Commonwealth 1144 and Mill Street Gardens, of approximately $189,000 and $59,000, 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 six months ended June 30, 2026 were approximately $43,028,000 compared to approximately $28.632,000 for the six months ended June 30, 2025, an increase of approximately $14,396,000 (50.3%), Excluding operating costs for the Hill Estates, two sold commercial properties, and Mill Street Heights (newly constructed) properties of approximately $10,568,000, net operating expenses increased approximately $3,828,000 (13.7%). The factors contributing to the increase are an increase in operating expenses of approximately $1,656,000, which include an increase in snow removal costs of approximately $1,054,000, (107.6%) and an increase in utility expenses of approximately $444,000 (13.8%), an increase in administrative expenses of approximately $872,000 (68.3%), including an increase in legal costs related to a tenant complaint ($200,000) and public policy contributions related to a residential housing regulatory matter in the Greater Boston area ($420,000), and an increase in repairs and maintenance expense of approximately $462,000 (7.4%). Depreciation and amortization expense increased approximately $7,687,000 (91.7%) of which approximately $7,439,000 of the expenses are associated with the recently purchased properties. Interest expense for the six months ended June 30, 2026 was approximately $11,444,000 compared to approximately $7,928,000 for the six months ended June 30, 2025, an increase of approximately $3,516,000
Page 53
38 (44.4%). 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, the mortgages incurred upon the acquisition of Hill
Page 54
Table of Contents Estates, the additional loan for Hill Estates of approximately $68,000,000, and the newly constructed property at Mill Street Heights of approximately $17,500,000. Interest and dividend income for the six months ended June 30, 2026 was approximately $221,000 compared to approximately $1,728,000 for the six months ended June 30, 2025, a decrease of approximately $1,507,000 (87.2%). The decrease in the interest income is due to the use of Investment in U.S. Treasury bills to acquire the Hill Estates property in June of 2025. At June 30, 2026, 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 $770,000 for the six months ended June 30, 2026, compared to net income of approximately $847,000 for the six months ended June 30, 2025, a decrease in income of approximately $77,000 (9.2%). Included in the income for the six months ended June 30, 2026 is depreciation and amortization expense of approximately $1,354,000. As a result of the changes discussed above, the net loss for the six months ended June 30, 2026 was approximately $5,067,000 compared to income of approximately $7,945,000 for the six months ended June 30, 2025, a decrease in net income of approximately $13,012,000 (163.8%). LIQUIDITY AND CAPITAL RESOURCES The Partnership’s principal source of cash during the first six months of 2026 was the collection of rents. The Partnership’s principal source of cash during the first six months of 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 the first six months of 2026 was improvements to rental properties, mortgage principal payments, the repurchase of depositary receipts, and distributions to partners. The Partnership’s principal use of cash during the first six months of 2025 was the purchase of a new property, construction of the Mill Street Development property, improvements to rental properties, mortgage principal payments, purchases of U.S. Treasury bills, and distributions to partners. The majority of cash and cash equivalents of $24,749,739 at June 30, 2026 and $26,668,978 at December 31, 2025 was held in interest bearing accounts at creditworthy financial institutions. The decrease in cash of $1,919,239 for the six months ended June 30, 2026 is summarized as follows: Six Months Ended June 30, 2026 2025 Cash provided by operating activities $ 7,569,795 $ 18,008,372 Cash (used in) investing activities (3,835,598) (40,919,964) Proceeds from mortgage notes payable — 56,746,890 Principal payments of mortgage notes payable (1,630,247) (20,482,614) Repurchase of Depositary Receipts, Class B and General Partner Units (1,240,748) (291,218) Distributions paid (2,782,441) (13,999,902) Net (decrease) in cash and cash equivalents $ (1,919,239) $ (938,436) The cash provided by operating activities is approximately $7,570,000. The cash used in investing activities is primarily for the improvement of rental properties, offset by the sale of two commercial properties. The cash used in financing activities include mortgage principal payments and distributions to partners, and repurchase of depositary receipts. During 2026, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $6,944,000. These improvements were funded from cash
Page 55
39 reserves. Cash
Page 56
Table of Contents 40 reserves have been adequate to fully fund improvements. The most significant improvements were made at Hill Estates, Hamilton Green, 62 Boylston, Hamilton Oaks, and Hamilton Battlegreen, at a cost of approximately $2,282,000, $937,000, $739,000, $457,000, and $404,000, respectively. During the six months ended June 30, 2026, the Partnership received distributions of approximately $720,000 from the investment properties. For the six months ended June 30, 2025, the Partnership received $838,000 in distributions from the investment properties. Included in these net distributions is the amount from Dexter Park of approximately $200,000 and $400,000, and 345 Franklin of approximately $245,000 and $200,000, respectively, for the six months ended June 30, 2026 and 2025. In August 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on September 30, 2026. In May 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on June 30, 2026. In March 2026, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on March 31, 2026. The Partnership anticipates that cash from operations, proceeds from loan refinancings, and availability under the line of credit should be sufficient to fund its current operations, pay distributions, and make required debt payments. Off-Balance Sheet Arrangements—Joint Venture Indebtedness As of June 30, 2026, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. As of June 30, 2026, our proportionate share of the non- recourse debt related to these investments was approximately $74,834,000. See Note 15 to the Consolidated Financial Statements. Contractual Obligations As of June 30, 2026, we are subject to debt obligations as described in the table below. Payments due by period 2026 2027 2028 2029 2030 Thereafter Total Contractual Obligations Long -term debt Mortgage debt $ 6,605,076 40,652,038 58,336,94621,581,796 862,348 401,362,106$ 529,400,310 Total Contractual Obligations $6,605,076$ 40,652,038$58,336,946$21,581,796$862,348$401,362,106$ 529,400,310 *Excluding unamortized deferred financing costs 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 15 to the Consolidated Financial Statements for a description of mortgage notes payable. The Partnerships has no other material contractual obligations to be disclosed.
Page 57
Table of Contents 41 Factors That May Affect Future Results Along with risks detailed in Item 1A of the Partnership’s Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission on March 13, 2026 and from time to time in the Partnership’s other 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. ● Our actual costs to develop properties may exceed our budgeted costs. ● 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 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.
Page 59
Table of Contents 42 ● 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. ● Revenue associated with residential properties may be limited in the future if rent restriction proposals are adopted by the Commonwealth of Massachusetts. On August 6, 2025, a citizen’s petition was filed by a coalition of housing advocacy organizations with the Massachusetts’ State’s Attorney General, to put a ballot initiative in front of voters in November 2026. If approved, the petition would have limited annual rent increases in Massachusetts to cost of living increases, with a 5% annual cap. On June 23, 2026, the Massachusetts Supreme Judicial Court held that the petition was constitutionally barred from the November 2026 ballot because the exemption for facilities operated for solely religious purposes made religion a factor in the petition application. If a future ballot measure were to be passed by voters, our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time. ● On August 1, 2025, a new Massachusetts state law became effective that prohibits real estate professionals, such as brokers, from charging tenants broker fees for services primarily provided to the landlord. Tenants may still choose to hire and pay for their own broker who will represent their interests in securing rental housing. This change may result in an increase in our rental expense. 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.
Page 60
Table of Contents 43 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 June 30, 2026, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $704,069,000 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 2035. Including any outstanding draws under the line of credit, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have no variable rate debt as of June 30, 2026. The increase or decrease in fair value of the Partnership’s fixed rate debt as of June 30, 2026 would be approximately $25,171,000 if market rates of interest on the Partnership’s variable rate debt increased or decreased by 100 basis points. 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 15 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” 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. There were no other changes in the Management Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the quarter ended June 30, 2026 that have materially affected or are reasonably likely to materially affect, the Management Company’s internal control over financial reporting. 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 have been no material changes to the Risk Factors in Item 1A, “Risk Factors” in our annual report on Form 10K for the year ended December 31, 2025.
Page 61
Table of Contents 44 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (a) None (b) None (c) Issuer Purchase of Equity Securities during the second quarter of 2026: Remaining number Depositary Receipts of Depositary Receipts Purchased as Part that may be purchasedAverage of Publicly Under the PlanPeriod Price Paid Announced Plan (as Amended) April 1-30, 2026 $ 60.98 304 438,632 May 1-31, 2026 $ 59.81 1,460 437,172 June 1-30, 2026 $ 60.92 12,784 424,388 Total 14,548 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. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. On March 12, 2025, the Board of Directors authorized the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written trading plan that complies with the requirements of Rule 10b5-1, Depositary Receipts and Partnership Units in such quantities, at such prices, in such manner and on such terms and conditions as the Authorized Persons determine are in the best interests of the Partnership; provided, however, that (i) the aggregate cost of Depositary Receipts and Partnership Units repurchased shall not exceed $5 million, (ii) no Depositary Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date hereof, (iii) no Depositary Receipt shall be repurchased( the “Repurchase Plan”); The Repurchase Plan requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership Agreement. The Repurchase Plan shall be made in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be made in accordance with all applicable laws and regulations in effect from time to time. On March 11, 2026, the General Partner authorized the President and Treasurer to renew the Repurchase Plan for one year. From August 20, 2007 through June 30, 2026, the Partnership has repurchased 1,575,610 Depositary Receipts at an average price of $32.36 per receipt (or $970.80) per underlying Class A Unit), 4,737 Class B Units and 249 General Partnership Units, both at an average price of $1,317 per Unit, totaling approximately $58,152,000 including brokerage fees paid by the Partnership. During the six months ended June 30, 2026, the Partnership purchased a total of 16,201 Depositary Receipts. The average price was $61.29 per receipt, or $1,838.70 per unit. The cost including commissions was approximately $993,000. The Partnership was required to repurchase 128.3 Class B Units and 6.8 General Partnership units at a cost of $235,483 and $12,394 respectively. Item 3. Defaults Upon Senior Securities None.
Page 63
Table of Contents 45 Item 4. Mine Safety Disclosure Not applicable. Item 5. Other Information None. Item 6. Exhibits See the exhibit index below. EXHIBIT INDEX Exhibit No. Description of Exhibit (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 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 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 June 30, 2026, formatted in Inline XBRL (eXtensible 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). (104) Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Page 64
Table of Contents 46 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: August 7, 2026 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 August 7, 2026 Ronald Brown (Principal Executive Officer) /s/ JAMESON BROWN Treasurer and Director of the General Partner August 7, 2026 Jameson Brown (Principal Financial Officer and Principal Accounting Officer) /s/ MARTINA ALIBRANDI Director of the General Partner August 7, 2026 Martina Alibrandi /s/ DAVID ALOISE Director of the General Partner August 7, 2026 David Aloise /s/ ANDREW BLOCH Director of the General Partner August 7, 2026 Andrew Bloch /s/ SALLY MICHAEL Director of the General Partner August 7, 2026 Sally Michael /s/ DAVID REIER Director of the General Partner August 7, 2026 David Reier
Page 65
Exhibit 31.1 New England Realty Associates Limited Partnership CERTIFICATION I, Ronald Brown, certify that: 1. I have reviewed this quarterly report on Form 10-Q of New England Realty Associates Limited Partnership; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ RONALD BROWN Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.) Date: August 7, 2026
Page 66
Exhibit 31.2 New England Realty Associates Limited Partnership CERTIFICATIONS I, Jameson Brown, certify that: 1. I have reviewed this quarterly report on Form 10-Q of New England Realty Associates Limited Partnership; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ JAMESON BROWN Principal Financial Officer (Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.) Date: August 7, 2026
Page 67
Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the six months ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ronald Brown, as President and Director of the Partnership’s General Partner, NewReal, Inc., and Jameson Brown, the Treasurer and a Director of the Partnership’s General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/ Ronald Brown Ronald Brown Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.) Date: August 7, 2026 /s/ Jameson Brown Jameson Brown Principal Financial Officer (Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.) Date: August 7, 2026 This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of §18 of the Security Exchange Act of 1934, as amended. A signed original of this written statement required by §906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.