New England Realty Associates Limited Partnership

Company Overview

Business Model: New England Realty Associates Limited Partnership is a Massachusetts Limited Partnership engaged in the acquisition, development, investment, operation, and sale of real estate. The Partnership, directly or through 34 Subsidiary Partnerships, owns and operates residential apartments, condominium units, and commercial properties. It also holds 40% to 50% ownership interests in seven Investment Properties (Joint Ventures), which are accounted for on the equity method. The long-term goals include managing, renting, and improving existing properties, and acquiring additional properties with income and capital appreciation potential. Proceeds from property sales or refinancings are used to reduce debt, reinvest in acquisitions, make distributions, repurchase equity interests, or fund operating expenses and reserves. The General Partner, NewReal, Inc., engages The Hamilton Company, Inc. to perform general management functions for the Partnership’s properties in exchange for management fees.

Market Position: The Partnership's properties are primarily located in the metropolitan Boston area of Massachusetts and Southern New Hampshire. As of February 1, 2026, the Partnership and its Subsidiary Partnerships owned 3,411 residential apartment units across 27 residential and mixed-use complexes, 19 condominium units, and approximately 138,000 square feet of commercial space. Additionally, the Partnership held a 40% to 50% interest in seven Investment Properties, comprising 688 residential units, one commercial unit, and a 50-car parking lot. The real estate market in these regions is highly competitive, with the Partnership competing for tenants with other residential and commercial properties. The residential vacancy rate for Partnership properties was 4.4% as of February 1, 2026, up from 2.3% in the prior year, with approximately half of the current vacancy attributed to Hill Estates (under renovation) and Mill Street Heights (new property in lease-up). Commercial vacancy for Partnership properties was 7.7% as of February 1, 2026, up from 1.8% in the prior year. The rental market is expected to experience slowing rent growth in 2026.

Recent Strategic Developments:

• Property Acquisitions:
  • On January 18, 2023, the Partnership purchased a 20,700 square foot commercial retail property in Framingham, Massachusetts, for approximately $10.151 million, funded from cash reserves.
  • On July 14, 2023, a 52-unit mixed-use property with approximately 3,400 square feet of commercial space in Boston, Massachusetts, was acquired for approximately $27.5 million, funded from cash reserves.
  • On June 18, 2025, the Partnership acquired a mixed-use property with 396 residential units and 3 commercial units in Belmont, Massachusetts, for $172 million. This acquisition was financed through the sale of U.S. Treasury bills, an additional $40 million borrowing on the Master Credit Facility, and a $67.5 million interim mortgage loan. Two additional commercial properties in Belmont, Massachusetts, were purchased for $3 million concurrently.
• Development Initiatives: The Partnership is developing the Mill Street Development project in Woburn, Massachusetts, a 72-unit apartment building (including 17 affordable units). As of December 31, 2025, approximately $35 million has been invested in this project, with $16.959 million in construction costs incurred in 2025.
• Capital Improvements: Total capital improvements to properties in 2025 amounted to approximately $30.691 million, including $17.599 million for the Mill Street Development project. The Partnership plans to invest approximately $17.069 million in capital improvements in 2026.
• Financing Activities:
  • On May 30, 2025, the Partnership borrowed an additional $18.664 million at a fixed interest rate of 5.84% to refinance Hamilton Highlands, and $40 million at a fixed rate of 5.99% for the Hill Estates purchase, both under the Master Credit Facility.
  • On December 30, 2025, the $67.5 million interim mortgage loan for the Belmont acquisition was refinanced with a $67.656 million mortgage loan under the Master Credit Facility at a 5.19% interest-only rate, maturing December 30, 2035.
  • On December 23, 2025, a $17.5 million loan for the Mill Street Development project was closed with Brookline Bank at a 5.67% interest-only rate for a two-year term.
• Share Repurchase Program: The General Partner renewed the Repurchase Plan on March 11, 2026, for one year, authorizing repurchases of Depositary Receipts and Partnership Units up to $5 million or 10% of cash and treasury bills, not exceeding $95 per Depositary Receipt. The program requires proportionate repurchases of Class B Units and General Partnership Units. In 2025, the Partnership repurchased 9,051 Depositary Receipts, 71.66 Class B Units, and 3.78 General Partnership Units for a total cost of $821,186.
• Revolving Line of Credit: On November 21, 2024, the Partnership established a new $25 million revolving line of credit with a three-year term and a floating interest rate (SOFR + 2.5%). As of December 31, 2025, the Partnership was in compliance with all financial covenants and had no outstanding balance.

Geographic Footprint: The Partnership's primary operational regions are Eastern Massachusetts and Southern New Hampshire. Key markets include Boston, Allston, Woburn, Nashua, Framingham, Lexington, Andover, Needham, Brockton, Lowell, Belmont, Newton, Brighton, Worcester, Danvers, Watertown, Burlington, and Quincy.

Financial Performance

Revenue Analysis

*Operating Income is presented as "Income Before Other Income (Expense)" in the filing.

Profitability Metrics:

• Operating Margin: 23.9% (2025) vs. 31.5% (2024)
• Net Margin: 6.8% (2025) vs. 19.4% (2024)

Investment in Growth:

• Capital Expenditures: $140,923,710 (2025) vs. $22,480,897 (2024)
• Strategic Investments:
  • Acquisition of Hill Estates, 26 Brighton Avenue, and 90 Concord properties for $175 million in June 2025.
  • Investment of approximately $35 million in the Mill Street Development project as of December 31, 2025.

Business Segment Analysis

The Partnership operates as a single business segment for financial reporting purposes, focusing on the ownership, operation, and development of its multifamily and commercial real estate portfolio. However, operational details are provided for distinct property types.

Residential Properties (Partnership-owned)

Financial Performance:

• Revenue: Approximately $83.10 million (+10.9% YoY) in 2025, representing 94% of total rental income.
• Key Growth Drivers: Acquisitions of Hill Estates (396 units) and Shawmut Place LLC (52 units), and the opening of Mill Street Heights (72 units) as of February 1, 2026. Rental income increases were also driven by properties such as Westside Colonial, Hamilton Oaks, Westgate Apartments, Hamilton Green, and School Street.
• Vacancy Rate: 4.4% as of February 1, 2026 (vs. 2.3% as of February 1, 2025).
• Free Rent Concessions: Resulted in an average reduction of approximately $7.78 per month per unit.

Product Portfolio:

• 3,411 residential apartment units across 27 residential and mixed-use complexes.
• 19 condominium units.
• Unit types include studios, one-bedroom, two-bedroom, three-bedroom, and four-bedroom units.

Market Dynamics:

• Located primarily in the metropolitan Boston area of Massachusetts and Southern New Hampshire.
• Highly competitive market with 12-month lease terms, predominantly maturing in the second and third quarters.
• Renewal rents increased by approximately 5.3% in 2025, while new leases saw an average decrease of 0.5%. Tenant renewals were approximately 73% in 2025.

Commercial Properties (Partnership-owned)

Financial Performance:

• Revenue: Approximately $5.30 million (+9.2% YoY) in 2025, representing 6% of total rental income.
• Operating Margin: Not separately disclosed.
• Vacancy Rate: 7.7% as of February 1, 2026 (vs. 1.8% as of February 1, 2025).
• Contingent Rentals: Approximately $974,000 in 2025.

Product Portfolio:

• Approximately 138,000 square feet of commercial space (as of February 1, 2026, after a post-period sale).
• Includes two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline, and commercial space in mixed-use properties in Boston, Brockton, Belmont, and Newton.
• Major commercial tenants include Trader Joe’s, Blue Pearl (at Staples Plaza), and Walgreen’s (at 653 Worcester Road), collectively accounting for approximately 33% of total commercial rental income.

Market Dynamics:

• Commercial leases often include rent escalations, with approximately 31% containing increases ranging from $0.17 to $3.06 per square foot per year.
• Significant lease expirations are scheduled for 2026 ($705,280 in annual base rent, 35,692 square feet) and 2027 ($679,848 in annual base rent, 17,202 square feet).

Investment Properties (Unconsolidated Joint Ventures)

Financial Performance:

• Income from investments in unconsolidated joint ventures: $1,473,960 (+15.0% YoY) in 2025.
• Key Growth Drivers: Primarily due to a 4.9% increase in rental revenue, reaching approximately $12.26 million in 2025.
• Vacancy Rate: 2.3% as of February 1, 2026 (vs. 1.9% as of February 1, 2025).
• Free Rent Concessions: Resulted in an average reduction of $22.43 per month per unit.

Product Portfolio:

• Seven residential and mixed-use complexes, totaling 688 residential units, one commercial unit, and a 50-car parking lot.
• The Partnership holds a 40% to 50% ownership interest in these ventures.
• Key properties include Hamilton Park Towers, LLC (409 residential units), Hamilton on Main Apartments, LLC (148 residential units), Hamilton Essex 81, LLC (49 residential units, one commercial space, 50-car parking lot), Hamilton Minuteman, LLC (42 residential units), 345 Franklin, LLC (40 residential units), and Hamilton 1025, LLC (commercial building only).

Market Dynamics:

• These joint ventures are co-owned with Brown Family related entities (47.6% to 59% ownership) and current/former employees of The Hamilton Company, Inc. (0% to 2.4% ownership).
• The Hamilton Company, Inc. manages these properties and receives management fees.
• Several joint ventures have significant mortgage debt, including Hamilton Park Towers, LLC ($125 million, 3.99% fixed, maturing 2028) and Hamilton on Main Apartments, LLC ($23.589 million, 5.425% interest-only, maturing 2034). The Partnership has no legal obligation to fund future operating deficits for some joint ventures where its carrying value is below zero, but intends to do so if needed.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In 2025, the Partnership repurchased 9,051 Depositary Receipts, 71.66 Class B Units, and 3.78 General Partnership Units for a total cost of $821,186. Since August 20, 2007, total repurchases amount to approximately $56.911 million, including 1,559,409 Depositary Receipts.
• Dividend Payments: The Partnership paid aggregate distributions of $16,793,527 ($144.00 per Unit or $4.80 per Depositary Receipt) in 2025, an increase from $11,244,559 ($96.00 per Unit or $3.20 per Depositary Receipt) in 2024.
• Future Capital Return Commitments: A quarterly distribution of $12.00 per Unit ($0.40 per Depositary Receipt) was approved in March 2026, payable on March 31, 2026. The Repurchase Plan was renewed in March 2026, authorizing up to $5 million or 10% of cash and treasury bills, not exceeding $95 per Depositary Receipt.

Balance Sheet Position:

• Cash and Equivalents: $26,668,978 as of December 31, 2025, up from $17,615,940 in 2024.
• Total Debt: Mortgage Notes Payable (net of unamortized deferred financing costs) totaled $527,596,823 as of December 31, 2025, compared to $406,205,910 in 2024.
• Net Cash Position: The Partnership had a net debt position of approximately $500.93 million as of December 31, 2025.
• Debt Maturity Profile: Total contractual mortgage debt obligations amount to $531.03 million, with $6.61 million due in 2026, $40.82 million in 2027, $31.89 million in 2028, $49.06 million in 2029, $0.85 million in 2030, and $401.80 million thereafter. The weighted average interest rate on mortgages was 4.19% as of December 31, 2025.
• Line of Credit: A $25 million revolving line of credit was established in November 2024, with no outstanding balance as of December 31, 2025.

Cash Flow Generation:

• Operating Cash Flow: $27,655,980 in 2025, a decrease from $31,934,479 in 2024.
• Free Cash Flow: The Partnership had negative free cash flow of approximately $113.27 million in 2025, primarily due to significant property acquisitions and development investments. In 2024, free cash flow was approximately $9.45 million.

Operational Excellence

Production & Service Model: The Partnership operates without direct employees, with its General Partner, NewReal, Inc., having no employees. All general management functions for the Partnership's properties are performed by The Hamilton Company, Inc., which is wholly owned by entities controlled by Jameson Brown and Harley Brown. The Hamilton Company, Inc. provides 66 individuals for supervision and maintenance at Partnership properties and 16 individuals at Joint Ventures. As a full-service real estate management company, The Hamilton Company, Inc. offers legal, construction, maintenance, architectural, accounting, and administrative services. The Partnership pays The Hamilton Company, Inc. a management fee (typically 4% of gross receipts, with variations for specific properties) and administrative fees for professional services.

Supply Chain Architecture: Key Suppliers & Partners:

• Property Management: The Hamilton Company, Inc. (related party) provides comprehensive management, maintenance, legal, accounting, construction, and architectural services.
• Lenders: KeyBank National Association (Master Credit Facility), Brookline Bank (various loans), John Hancock Life Insurance Company (U.S.A.) (for Hamilton Park Towers, LLC).
• General Contractor: NEI General Contracting, Inc. (for the Mill Street Development project).
• Legal Services: Saul Ewing LLP (related party, with a Director of NewReal, Inc. as a partner).
• Cybersecurity: Managed Service Provider and Managed Detection and Response Provider.

Facility Network:

• Manufacturing: Not applicable.
• Research & Development: Not applicable.
• Distribution: Not applicable.

Operational Metrics:

• Residential Vacancy Rate (Partnership properties, Feb 1, 2026): 4.4%
• Commercial Vacancy Rate (Partnership properties, Feb 1, 2026): 7.7%
• Joint Venture Residential Vacancy Rate (Feb 1, 2026): 2.3%
• Tenant Renewal Rate (2025): Approximately 73%, with an average rental increase of 5.3%.
• Leasing Commissions (2025): Approximately $914,000, an increase of 48.2% from 2024.
• Tenant Improvements (2025): Approximately $3,901,000, an increase of 9.0% from 2024.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: The Partnership primarily utilizes direct leasing for its residential and commercial properties.
• Digital Platforms: No specific digital sales channels or e-commerce initiatives are explicitly detailed beyond general leasing activities.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Major commercial tenants include Trader Joe’s, Blue Pearl (at Staples Plaza), and Walgreen’s (at 653 Worcester Road).
• Customer Concentration: These three tenants collectively represent approximately 33% of the Partnership's total commercial rental income, indicating a degree of concentration risk within the commercial portfolio.
• Residential Customers: The Partnership maintains a diverse portfolio of residential tenants across its various apartment and condominium units.

Geographic Revenue Distribution:

• The Partnership's revenue is primarily generated from its properties located in Eastern Massachusetts and Southern New Hampshire. No specific percentage breakdown of revenue by region or country is provided.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The real estate market in the metropolitan Boston area of Massachusetts and Southern New Hampshire is highly competitive. The Partnership's performance is closely tied to general economic conditions, demand for rental housing and commercial space, and prevailing interest rates and inflation. Operating costs, including property taxes, insurance, heating, and utilities, are significant. The industry is also subject to various laws and regulations (e.g., ADA, FHAA, environmental laws), with compliance potentially incurring substantial expenditures. New City of Boston regulations on building emissions and a potential Massachusetts Rent Control Initiative could significantly impact future operations and profitability.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Other residential apartment and condominium complexes in the metropolitan Boston area and Southern New Hampshire.
• Other shopping malls and office buildings in the specific submarkets where the Partnership's commercial properties are located.
• Alternative rental options such as single and multifamily rental homes, and owner-occupied homes.

Emerging Competitive Threats:

• New entrants and existing competitors developing similar multifamily and commercial properties.
• Regulatory changes, such as the City of Boston's Building Emissions Reduction and Disclosure Ordinance, which could increase operating costs and fines for non-compliance.
• The proposed Massachusetts Rent Control Initiative, if passed, could significantly limit rental income growth and impact property valuations.
• Recent state law changes regarding real estate broker fees for tenants may increase the Partnership's rental expenses.

Competitive Response Strategy: The Partnership's strategy involves actively managing, renting, and improving its existing properties while seeking opportunities to acquire additional properties with strong income and capital appreciation potential. It also maintains flexibility to sell or refinance properties to optimize its portfolio and capital structure. The Partnership continuously evaluates and updates its cybersecurity measures to protect its operations and data.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Economic Climate: The Partnership's financial condition is highly dependent on the real estate market and general economic conditions in Eastern Massachusetts and Southern New Hampshire. A decline in these markets could adversely affect income and distributions.
• Demand Fluctuation: A lessening of demand for multifamily and commercial properties could impact occupancy rates and rental income.
• Competition: Intense competition from other properties and rental alternatives may hinder the Partnership's ability to attract and retain tenants or increase rental rates.
• Illiquidity of Real Estate: Real estate investments are generally illiquid, which may limit the Partnership's ability to sell properties quickly or respond to changing market conditions.
• Climate Change: Physical effects of climate change, such as increased storm intensity and rising sea levels, could materially affect properties, operations, and business. Indirect effects include increased property insurance and energy costs.
• Inflation: Rising operating and general and administrative expenses, interest expense, and construction costs due to inflation could reduce net income if not offset by rental income increases. Commercial leases with fixed rent increases may not keep pace with inflation.
• Regulatory Changes (Boston): The City of Boston's Building Emissions Reduction and Disclosure Ordinance, with emissions standards phasing in during 2025, could lead to increased utility and administrative costs, and potential fines for non-compliance.
• Rent Control Initiative (Massachusetts): A potential ballot initiative in November 2026 to establish rent control could limit annual residential rent increases, adversely affecting financial performance.
• Broker Fee Law (Massachusetts): A new state law effective August 1, 2025, prohibiting real estate professionals from charging tenants broker fees for landlord services, may increase the Partnership's rental expenses.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Geographic Concentration: The concentration of properties in Eastern Massachusetts and Southern New Hampshire links the Partnership's performance directly to regional economic conditions and local market dynamics.

Other Operational Risks:

• Insurance Adequacy: Certain catastrophic risks (e.g., earthquakes, floods, acts of war, terrorist attacks) may be uninsurable or not fully covered, potentially leading to significant losses. Mold and environmental exposures are generally not covered.
• Cybersecurity: Security breaches and disruptions could compromise information, expose the Partnership to liability, disrupt operations, increase cybersecurity insurance premiums, and damage its reputation.
• Development and Acquisition Risks: Development projects and acquisitions are subject to risks such as financing availability, competition for investments, failure to achieve anticipated operating results, construction cost overruns, and delays.
• Key Personnel Dependency: The Partnership's success relies significantly on key members of The Hamilton Company, Inc. management team. The loss of these executives could have a material adverse effect, and no key-man life insurance is held.

Financial & Regulatory Risks

Market & Financial Risks:

• Debt Financing: The vast majority of assets are encumbered by project-specific, non-recourse mortgage debt. There is a risk of insufficient cash flow for debt service, inability to refinance, or foreclosure.
• Financial Covenants: Failure to comply with financial covenants (e.g., leverage ratio, debt service coverage ratio, minimum liquidity, debt yield) in debt agreements could result in default and acceleration of debt obligations.
• Interest Rate Risk: While most long-term debt is fixed-rate, the Partnership is exposed to interest rate movements, particularly with its revolving line of credit.
• Limited Public Debt Access: The Partnership's limited access to public debt markets means it relies heavily on secured mortgages for financing.

Regulatory & Compliance Risks:

• Environmental Liability: As a real estate owner/operator, the Partnership may be liable for costs of hazardous or toxic substance removal/remediation, regardless of fault.
• Accessibility Laws: Non-compliance with the Americans with Disabilities Act (ADA) and the Fair Housing Amendments Act of 1988 (FHAA) could result in fines or damages.
• Tax Law Changes: Changes in federal income tax laws, regulations, or interpretations could adversely affect the Partnership's tax treatment and distributions to partners. IRS audit adjustments could also reduce cash available for distribution.
• Legal Proceedings: While not currently subject to material litigation, the Partnership may face lawsuits related to premises liability, housing discrimination, and landlord-tenant laws, which could incur substantial costs.

Innovation & Technology Leadership

Research & Development Focus:

• Not explicitly detailed as a separate R&D focus for the Partnership.

Intellectual Property Portfolio:

• No material information disclosed regarding patent strategy, licensing programs, or IP litigation.

Technology Partnerships:

• The Partnership engages a Managed Service Provider and a Managed Detection and Response Provider to support its cybersecurity program. These partners actively manage firewalls, multi-factor authentication, antivirus, and Azure environment, and provide quarterly recommendations for best industry practice.

Leadership & Governance

Executive Leadership Team