ITEM 1A. RISK FACTORS
We are subject to certain risks and uncertainties as described below. These risks and uncertainties may not be the only ones we face; there may be additional risks that we do not presently know of or that we currently consider immaterial. All of these risks could adversely affect our business, financial condition, results of operations and cash flows. Our ability to pay distributions on, and the market price of, our equity securities may be adversely affected if any of such risks are realized. All investors should consider the following risk factors before deciding to purchase or sell securities of the Partnership.
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We are subject to risks inherent in the ownership of real estate. We own and manage multifamily apartment complexes and commercial properties that are subject to varying degrees of risk generally incident to the ownership of real estate. Our financial condition, the value of our properties and our ability to make distributions to our shareholders will be dependent upon our ability to operate our properties in a manner sufficient to generate income in excess of operating expenses and debt service charges, which may be affected by the following risks, some of which are discussed in more detail below:
● a lessening of demand for the multifamily and commercial units that we own;
● development by competitors of competing multi-family communities;
● increases in property and liability insurance costs;
● weather and other conditions that might adversely affect operating expenses;
● our inability to control operating expenses or achieve increases in revenues;
● the results of litigation filed or to be filed against us;
● risks related to our joint ventures;
● catastrophic property damage losses that are not covered by our insurance;
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We are dependent on rental income from our multifamily apartment complexes and commercial properties. If we are unable to attract and retain tenants or if our tenants are unable to pay their rental obligations, our financial condition and funds available for distribution to our shareholders will be adversely affected.
Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer. Although we employ a number of measures to prevent, detect and mitigate cybersecurity attacks, our business is at risk from and may be impacted by such attacks as there is no guarantee such efforts will be successful in preventing a cyber-attack. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks, and there can be no assurance that our actions, security measures, and controls designed to prevent, detect, or respond to intrusion; to limit access to data; to prevent loss, destruction, alteration, or exfiltration of business information; or to limit the negative impact from such attacks can provide absolute security against a cybersecurity incident. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disruption to our operations, increased cybersecurity insurance premiums and damage our reputation, which could adversely affect our business. Our Audit Committee is responsible for overseeing our cybersecurity and data privacy risks. Our cybersecurity program is led by the Hamilton Company’s Chief Financial Officer, who, along with the Hamilton Company’s Director of Information Technology, provide regular updates each quarter to the Audit Committee regarding this program, including information about the cybersecurity threat landscape, investments in infrastructure and opportunities to protect and enhance the Company’s systems and security of products and operations. In addition, the Board of Directors of the General Partner (the “Board” or “Board of Directors”) receives periodic briefings from management regarding cybersecurity activities and initiatives.
Our multifamily apartment complexes and commercial properties are subject to competition. Our properties and joint venture investments are located in developed areas that include other properties. The properties also compete with other rental alternatives, such as condominiums, single and multifamily rental homes, owner occupied single and multifamily homes, and commercial properties in attracting tenants. This competition may affect our ability to attract and retain residents and to increase or maintain rental rates.
The properties we own are concentrated in Eastern Massachusetts and Southern New Hampshire. Our performance, therefore, is linked to economic conditions and the market for available rental housing and commercial space in these states. A decline in the market for apartment housing and/or commercial properties may adversely affect our financial condition, results of operations and ability to make distributions to our shareholders.
Our insurance may not be adequate to cover certain risks. There are certain types of risks, generally of a catastrophic nature, such as earthquakes, floods, windstorms, act of war and terrorist attacks that may be uninsurable, or are not economically insurable, or are not fully covered by insurance. Moreover, certain risks, such as mold and environmental exposures, generally are not covered by our insurance. Should an uninsured loss or a loss in excess of insured limits occur, we could lose our equity in the affected property as well as the anticipated future cash flow from that property. Any such loss could have a material adverse effect on our business, financial condition and results of operations.
Debt financing could adversely affect our performance. The vast majority of our assets are encumbered by project specific, non-recourse, non-cross-collateralized mortgage debt. There is a risk that these properties will not have sufficient cash flow from operations for payments of required principal and interest. We may not be able to refinance these loans at an amount equal to the loan balance and the terms of any refinancing may not be as favorable as the terms of existing indebtedness. If we are unable to make required payments on indebtedness that is secured by a mortgage, the Partnership will either pay down the underlying debt on the property or the property securing the mortgage may be foreclosed with a consequent loss of income and value to us.
We are obligated to comply with financial covenants in our indebtedness that could restrict our range of operating activities. The mortgages on our properties contain customary negative covenants, including limitations on our ability, to incur additional debt, without prior consent of the lender and other items. Failure to comply with these covenants could cause a default under the agreements and, in certain circumstances; our lenders may be entitled to
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accelerate our debt obligations. Defaults under our debt agreements could materially and adversely affect our financial condition and results of operations.
Real estate investments are generally illiquid, and we may not be able to sell our properties when it is economically or strategically advantageous to do so. Real estate investments generally cannot be sold quickly, and our ability to sell properties may be affected by market conditions. We may not be able to diversify or vary our portfolio promptly in accordance with our strategies or in response to economic or other conditions.
Our access to public debt markets is limited. Substantially all of our debt financings are secured by mortgages on our properties because of our limited access to public debt markets.
Litigation may result in unfavorable outcomes. Like many real estate operators, we may be involved in lawsuits involving premises liability claims, housing discrimination claims and alleged violations of landlord-tenant laws, which may give rise to class action litigation or governmental investigations. Any material litigation not covered by insurance, such as a class action, could result in substantial costs being incurred.
Our financial results may be adversely impacted if we are unable to sell properties and employ the proceeds in accordance with our strategic plan. Our ability to pay down debt, reduce our interest costs, repurchase Depositary Receipts and acquire properties is dependent upon our ability to sell the properties we have selected for disposition at the prices and within the deadlines we have established for each respective property.
The costs of complying with laws and regulations could adversely affect our cash flow and ability to make distributions to our shareholders. Our properties must comply with Title III of the Americans with Disabilities Act (the “ADA”) to the extent that they are “public accommodations” or “commercial facilities” as defined in the ADA. The ADA does not consider apartment complexes to be public accommodations or commercial facilities, except for portions of such properties that are open to the public. In addition, the Fair Housing Amendments Act of 1988 (the “FHAA”) requires apartment complexes first occupied after March 13, 1990, to be accessible to the handicapped. Other laws also require apartment communities to be handicap accessible. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants. We may be subject to lawsuits alleging violations of handicap design laws in connection with certain of our developments. If compliance with these laws involves substantial expenditures or must be made on an accelerated basis, our ability to make distributions to our shareholders could be adversely affected.
Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under or in the property. This liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of the substances. Other laws impose on owners and operators certain requirements regarding conditions and activities that may affect human health or the environment. Failure to comply with applicable requirements could complicate our ability to lease or sell an affected property and could subject us to monetary penalties, costs required to achieve compliance and potential liability to third parties. We are not aware of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties. Nonetheless, it is possible that material environmental contamination or conditions exist, or could arise in the future, in the apartment communities or on the land upon which they are located.
We are subject to the risks associated with investments through joint ventures. Seven of our properties are owned by joint ventures in which we do not have a direct controlling interest. We may enter into joint ventures, including joint ventures that we do not control, in the future. Any joint venture investment involves risks such as the possibility that the co-venturer may seek relief under federal or state insolvency laws or have economic or business interests or goals that are inconsistent with our business interests or goals. While the bankruptcy or insolvency of our co-venturer generally should not disrupt the operations of the joint venture, we could be forced to purchase the co-venturer’s interest in the joint venture or the interest could be sold to a third party. We also may guarantee the indebtedness of our joint ventures. If we do not have control over a joint venture, the value of our investment may be affected adversely by a third party that may have different goals and capabilities than ours.
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We are subject to risks associated with development, acquisition and expansion of multifamily apartment complexes and commercial properties. Development projects and acquisitions and expansions of apartment complexes are subject to a number of risks, including:
● availability of acceptable financing;
● competition with other entities for investment opportunities;
● failure by our properties to achieve anticipated operating results;
● construction costs of a property exceeding original estimates;
● delays in construction; and
We are subject to control by our directors and officers. The directors and executive officers of the General Partner and members of their families and related entities owned approximately 35% of our Depositary Receipts as of December 31, 2025. Additionally, management decisions rest with our General Partner without limited partner approval.
Competition for skilled personnel could increase our labor costs. We and our management company compete with various other companies in attracting and retaining qualified and skilled personnel who are responsible for the day- to-day operations of our properties. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.
We depend on our key personnel. Our success depends to a significant degree upon the continued contribution of key members of the management company, who may be difficult to replace. The loss of services of these executives could have a material adverse effect on us. There can be no assurance that the services of such personnel will continue to be available to us. We do not hold key-man life insurance on any of our key personnel.
Changes in market conditions could adversely affect the market price of our Depositary Receipts. As with other publicly traded equity securities, the value of our Depositary Receipts depends on various market conditions, which may change from time to time. Among the market conditions that may affect the value of our Depositary Receipts are the following:
● the extent of investor interest in us;
● our financial performance; and
● general stock and bond market conditions.
The market value of our Depositary Receipts is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our Depositary Receipts may trade at prices that are higher or lower than our net asset value per Depositary Receipt.
We face possible risks associated with the physical effects of climate change. We cannot predict with certainty whether climate change is occurring and, if so at what rate. However, the physical effects of climate change could have a material effect on our properties, operations, and business. To the extent climate change causes changes in
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weather patterns, our markets could experience increases in storm intensity and rising sea levels. Over time, these conditions could result in declining demand for our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. Proposed federal legislation to address climate change could increase utility and other costs of operating our properties which, if not offset by rising rental income, would reduce our net income. There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.
Risk of changes in the tax law applicable to real estate partnerships. Since the Internal Revenue Service, the United States Treasury Department and Congress frequently review federal income legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any such legislative action may prospectively or retroactively modify our tax treatment and therefore, may adversely affect taxation to us, and/or our partners.
If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustments directly from the Partnership. If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties and interest, our cash available for distribution to our partners might be substantially reduced.
Some of our costs, such as operating and general and administrative expenses, interest expense, and real estate acquisition and construction costs, are subject to inflation. A portion of our operating expenses is sensitive to inflation. These include expenses for property-related contracted services such as janitorial and engineering services, utilities, repairs and maintenance, and insurance. Property taxes are also impacted by inflationary changes as taxes are regularly reassessed based on changes in the fair value of our properties. Additionally, inflationary pricing may have a negative effect on real estate acquisitions and the construction costs necessary to complete our renovation, development and redevelopment projects, including, but not limited to, costs of construction materials, labor, and services from third-party contractors and suppliers. Our commercial leases have fixed rent increases which may not increase in line with inflation, thus causing our net operating income to decrease. As a result, our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time.
Recent City of Boston regulations impose new energy performance standards and fines that may increase utilities and administrative costs in order to comply with disclosure and energy reduction requirements. The City of Boston has implemented a Building Emissions Reduction and Disclosure Ordinance that sets specific requirements for large buildings to reduce energy use with the goal of targeting zero emissions for large buildings by 2050. The ordinance restricts emissions standards to certain units that begin phasing in during 2025 with such limits decreasing over time according to specific thresholds based upon building use type. Non-compliance with either disclosure requirements or emission limits may result in the imposition of penalties for such time as non-compliance remains in effect. As a result, our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time.
AMassachusetts Rent Control Initiativemay be on theballot onNovember 3, 2026in Massachusettsas anindirect initiated state statute. The ballot initiative would establish rent control in Massachusetts, limiting annual rent increases for residential units to the Consumer Price Index (CPI) or 5%, whichever is lower. The annual rent increase limit would be in place whether or not there was a change in tenancy in the rental unit. The initiative states that the rent amount in place on January 31, 2026, would be the base rent on which annual increases are calculated; if the unit was vacant on that date, the most previously used rental price would serve as the base rent. The rent increase limit would exempt owner -occupied buildings with fewer than 5 units; facilities where rent is subject to regulation by other public authorities (though not including those occupied by a tenant with a mobile housing voucher) dwelling units rented primarily to transient guests for less than 14 consecutive days; facilities operated only for educational, religious, or nonprofit purposes; and dwelling units with a date of first occupancy that is less than 10 years old. Our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time if voters were to pass such an initiative.
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Recent changes to state law may increase our rental expense. 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.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
The Partnership’s information technology, communication networks, system applications, accounting and financial reporting platforms and related systems, and those that are offered to residents and tenants, are integral to the operation of the business. The Partnership utilizes these systems, among others, for financial analysis, management, and reporting, for facilitation of operations, including for the initiation, generation, and completion of resident leasing, for internal communications, and for various other aspects of the business.
The Partnership’s cybersecurity strategy is focused on detection, protection, incident response, security risk management and mitigation, and resiliency of the cybersecurity infrastructure. The Partnership has implemented or is inthe process of continuously evaluating, testing and updating various information security processes and policies designed to identify, assess and manage material risks from cybersecurity threats to the Partnership’s critical computer networks, third-party hosted services, communications systems, hardware and software, and critical data, including confidential information that is proprietary, strategic or competitive in nature, as well as any personally identifiable information related to the Partnership’s residents’ and employees’ personal data.
To operate its business, the Partnership engages certain third-party vendors to perform a variety of functions. The Partnership seeks to engage reliable, reputable service providers. Depending upon the nature of the services and the sensitivity of the data that a third-party service provider processes, the Partnership’s vendor management procedures include reviewing the cybersecurity procedures, imposing contractual requirements, and conducting as needed periodic reassessments. The Partnership seeks to further enhance this review to expand the scope and depth of this analysis.
Cybersecurity is a critical component of our risk management process. We recognize that no single technology, process, or business control can effectively prevent or mitigate all risks, thus we use a variety of tools including multi-factor authentication, AI-powered antivirus security platform and firewall protection to help identify, protect, detect, respond to, and recover from cyber threats. These individual technologies work together as part of our strategy to minimize risk. This strategy is tested through audits and independent program assessments, as well as through additional exercises with our Managed Service Provider, and Managed Detection and Response Provider, designed to assess effectiveness. The Managed Service Provider, along with the Hamilton Company’s IT department, actively manages our firewalls, multi-factor authentication, antivirus, and Azure environment. The Partnership’s Managed Service Provider, along with our Managed Detection and Response Provider, also review our cybersecurity program on a quarterly basis and provide recommendations toward best industry practice. Our cybersecurity program is continually evolving to align with NIST standards, and we regularly monitor our progression toward these standards.
Our Audit Committee is responsible for overseeing our cybersecurity and data privacy risks. Our cybersecurity program is led by the Hamilton Company’s Chief Financial Officer, who, along with the Hamilton Company’s Director of Information Technologywho has been with Hamilton for 40 years, provide regular updates each quarter to the Audit Committee regarding this program, including information about the cybersecurity threat landscape, investments in infrastructure and opportunities to protect and enhance the Company’s systems and security of products and operations. The Board also receives periodic briefings from management regarding cybersecurity activities and initiatives
The Partnership’s cybersecurity program is designed to safeguard the confidentiality, integrity and availability
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of data and systems within the Company’s environment to effectively support our business objectives and customer needs. Our commitment to cybersecurity focuses on enhancing our prevention, monitoring, and detection response capabilities to identify and respond to evolving threats. We believe cybersecurity is the responsibility of every employee of the Hamilton Company, and it is prioritized each year. We regularly test, educate, and share best practices with employees of the Hamilton Company to raise awareness of cyber threats through a comprehensive security awareness training program. Our Managed Service Provider, along with the Hamilton Company’s IT department, are responsible for testing the Partnership’s ability to restore critical infrastructure on a monthly and quarterly basis. Backup procedures include a daily scan and quarantine of any virus or malware activity found on the Partnership’s network. Additionally, incident response and disaster recovery plans are reviewed and updated annually.
During 2025, we have not encountered cybersecurity challenges that have materially impaired our operations, business strategy or financial condition.
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ITEM 2. PROPERTIES
The Partnership and its Subsidiary Partnerships own the Apartment Complexes, the Condominium Units, the Commercial Properties and a 40-50% interest in seven Investment Properties. See also “Item 13. Certain Relationships and Related Transactions and Director Independence” for information concerning affiliated transactions.
The table below lists the location of the 3,411 Apartment Units, the number and type of units in each complex, the range of rents and vacancies as of February 1, 2026, the principal amount outstanding under any mortgages as of December 31, 2025, the fixed interest rates applicable to such mortgages, and the maturity dates of such mortgages.
Mortgage Balance
and Interest Rate Maturity
Number and Type As of Date of
62 Boylston Street 0 three bedroom N/A 3.97 %
Boston, MA 0 two bedroom N/A
Brookside Associates, LLC 44 units — $ 6,175,000 2035
5–7–10–12 Totman Road 0 three bedroom N/A 3.53 %
Woburn, MA 34 two bedroom $ 2,270 – 2,325
0 studios N/A
160–170 Concord Street 0 three bedroom N/A 2.97-5.99 %
Nashua, NH 53 two bedroom $ 1,875 – 2,150
0 studios N/A
Allston, MA 4 two bedroom $ 2,875 – 3,175
1 one bedroom $ 2,300 – 2,300
Allston, MA 11 two bedroom $ 2,500 – 2,950
Nera Dean Street Associates, LLC 69 units 5 $ 9,732,984 2035
38–48 Dean Street 0 three bedroom N/A 2.97-5.99 %
Norwood, MA 66 two bedroom $ 2,200 – 2,500
3 one bedroom $ 1,975 – 2,050
0 studios N/A
Framingham, MA 47 two bedroom $ 2,175 – 2,375
1 studio $ 1,600 – 1,600
34–42 Worthen Road 0 three bedroom N/A 4.95 %
Lexington, MA 24 two bedroom $ 2,750 – 3,250
0 studios N/A
Andover, MA 168 two bedroom $ 2,600 – 3,200
0 studios $ N/A
755-757 Highland Avenue 0 three bedroom N/A 2.97-5.99 %
Needham,Ma. 76 two bedroom $ 2,850 – 3,300
2 one bedroom $ 2,450 – 2,450
1 studio $ 2,400 – 2,400
30–50 Oak Street Extension 0 three bedroom N/A 2.97-5.99 %
40–60 Reservoir Street 96 two bedroom $ 2,145 – 2,450
Brockton, MA 159 one bedroom $ 1,875 – 2,050
Highland Street Apartments L.P. 36 units — $ 4,084,284 2035
38–40 Highland Street 0 three bedroom N/A 2.97-5.99 %
Lowell, MA 24 two bedroom $ 1,700 – 1,900
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Mortgage Balance
and Interest Rate Maturity
Number and Type As of Date of
Belmont, MA 325 two bedroom $ 2,375 – 2,925
65 one bedroom $ 1,850 – 2,400
3 studios $ 1,775 – 2,000
Linhart L.P. 9 units — $
4–34 Lincoln Street 0 three bedroom N/A — %
Newton, MA 0 two bedroom N/A
5 one bedroom $ 1,850 – 2,250
Woburn,MA. 40 two bedroom $ 2,275 3,075
0 studios
57 Mill Street 0 three bedroom N/A 3.59 %
Woburn,MA. 116 two bedroom $ 2,200 2,875
62 one bedroom $ 2,150 – 2,275
3 studios $ 1,775 – 1,800
Brighton, MA 54 two bedroom $ 3,250 – 3,500
1 one bedroom $ 2,400 – 2,400
0 studios N/A
Olde English Apartments L.P. 84 units — $ 10,254,456 2035
703–718 Chelmsford Street 0 three bedroom N/A 2.97-5.99 %
Lowell, MA 47 two bedroom $ 1,750 – 2,100
376-382 Sunderland road 0 three bedroom N/A 2.97-5.99 %
Worcester, MA 89 two bedroom $ 1,950 – 2,450
0 studios N/A
Residences at Captain Parkers LLC 94 units 6 $ 20,750,000 2029
Lexington, MA 48 two bedroom $ 2,850 – 3,800
38 one bedroom $ 2,500 – 2,950
0 studios N/A
3–17 River Drive 0 three bedroom N/A 2.97-5.99 %
Danvers, MA 60 two bedroom $ 1,950 – 2,450
5 one bedroom $ 1,950 – 2,050
9 School Street 0 three bedroom N/A 2.97-5.99 %
Framingham, MA 96 two bedroom $ 2,675 – 2,725
0 studios
Shawmut Place LLC 52 units — $ —
and 26-30 Rutland St 4 three bedroom $ 3,435 – 4,750
Boston, MA 13 two bedroom $ 3,175 – 4,100
23 one bedroom $ 3,195 – 3,475
0 studios N/A
10–70 Westland Street 0 three bedroom $ N/A 2.97-5.99 %
Brockton, MA 84 one bedroom $ 1,500 – 1,925
0 studios N/A
2–20 Westgate Drive 0 three bedroom N/A 2.97-5.99 %
Woburn, MA 110 two bedroom $ 2,100 – 2,550
0 studios N/A
Westgate Apartments Burlington, LLC 20 units — $ 5,446,485 2035
105–107 Westgate Drive 0 three bedroom N/A 2.97-5.99 %
Burlington, MA 12 two bedroom $ 2,300 – 3,150
8 one bedroom $ 2,000 – 2,350
0 studios N/A
264-290 Grove Street 0 three bedroom N/A 3.79 %
Newton, MA 80 two bedroom $ 1,900 – 2,925
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Current free rent concessions would result in an average reduction in unit rents of approximately $7.78per month per unit. Free rent expense amortized in 2025 was approximately $313,000 compared to approximately $122,000 in 2024.
See Note 5 to the Consolidated Financial Statements for information relating to the mortgages payable of the Partnership and Subsidiary Partnerships.
Condominium Units
The Partnership owns and leases to residential tenants 19 Condominium Units in the metropolitan Boston area of Massachusetts.
The table below lists the location of the 19 Condominium Units, the type of units, the range of rents received by the Partnership for such units, and the number of vacancies as of February 1, 2026.
Mortgage Balance
Number and Type and Interest Rate Maturity
of Units Owned As of Date of
Riverside Apartments 19 units 1 — —
8–20 Riverside Street 0 three bedroom N/A
Watertown, MA 12 two bedroom $ 2,400 – 2,675
5 one bedroom $ 2,200 – 2,400
Commercial Properties
BOYLSTON DOWNTOWN LP. In 1995, this Subsidiary Partnership acquired the Boylston Downtown property in Boston, Massachusetts (“Boylston”). This mixed-use property includes 15,908 square feet of rentable commercial space. As of February 1, 2026, the commercial space was fully occupied, and the average rent per square foot was $35.23. For mortgage balance, interest rate and maturity date information see “Apartment Complexes” above.
HAMILTON OAKS ASSOCIATES, LLC. The Hamilton Oaks Apartment complex in Brockton, Massachusetts was acquired by the Partnership in December 1999 through Hamilton Oaks Associates, LLC, and includes 6,075 square feet of rentable commercial space, occupied by a daycare center. As of February 1, 2026, the commercial space was fully occupied, and the average rent per square foot was $27.24.The Partnership also rents roof space for a cellular phone antenna at an average rent of approximately $63,000 per year through November 2040. For mortgage balance, interest rate and maturity date information see “Apartment Complexes” above.
HILL ESTATES NERA, LLC. The Hill Estates Apartment complex in Belmont, Massachusetts was acquired by the Partnership in June 2025 through Hill Estates NERA, LLC, and includes 7,997 square feet of rentable commercial space. As of February 1, 2026, the commercial space had vacant square footage of 4,856 square feet and the average rent per square foot was $33.37.
LINHART LP. In 1995, the Partnership acquired the Linhart property in Newton, Massachusetts (“Linhart”). This mixed-use property includes 20,357 square feet of rentable commercial space. As of February 1, 2026, the commercial space had vacant square footage of 1,991 square feet, and the average rent per square foot was $28.64.
NORTH BEACON 140 LP. In 1995, this Subsidiary Partnership acquired the North Beacon property in Boston, Massachusetts. This mixed-use property includes 1,039 square feet of rentable commercial space. The property was fully rented as of February 1, 2026, and the average rent per square foot was $46.20. For mortgage balance, interest rate and maturity date information see “Apartment Complexes” above.
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WRF 659 LLC. In 1999, the Partnership acquired the Staples Plaza shopping center in Framingham, Massachusetts. The shopping center consists of 38,055 square feet of rentable commercial space. As of February 1, 2026, this property was fully occupied and the average rent per square foot was $26.33.
HAMILTON LINEWT ASSOCIATES, LLC. In 2007, the Partnership acquired a retail block in Newton, Massachusetts. The property consists of 5,850 square feet of rentable commercial space. As of February 1, 2026, the commercial space was fully occupied and the average rent per square foot was$37.33.
HAMILTON CYPRESS LLC. In 2008, the Partnership acquired a medical office building in Brookline, Massachusetts. The property consists of 17,718 square feet of rentable commercial space. As of February 1, 2026, the space had vacant square footage of 4,068 square feet, and the average rent per square foot was $43.96.
653 WORCESTER Road LLC. On January 18, 2023, the Partnership purchased a commercial retail property of 20,693 square feet of rentable commercial space located at 653 Worcester Road in Framingham, Massachusetts for the sum of approximately $10,151,000. As of February 1, 2026, the space was fully occupied and the average rent per square foot was$28.25.
SHAWMUT PLACE, LLC. On July 14, 2023, the Partnership purchased a 52 unit mixed use property in the South End neighborhood of Boston, MA comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and 7,299 square feet of commercial space for a purchase price of approximately $27,500,000. The commercial space was fully occupied as of February 1, 2026 and the average rent per square foot was $23.17.
The following information is provided for commercial leases:
Total square Total number Percentage of
Annual base rent feet for of leases annual base rent
2033 — — — — %
2035 — — — — %
Commercial rental income is accounted for using the straight-line method. Approximately 31% of our commercial leases contain rent escalations which range from $0.17 to $3.06 per square foot per year.
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Investment Properties
See Note 15 to the Consolidated Financial Statements for additional information regarding the Investment Properties.
The Partnership has a 50% ownership interest in the properties summarized below:
Mortgage Balance
and Interest Rate Maturity
Number and Type As of Date of
345 Franklin Street 0 three bedroom N/A 3.87 %
Cambridge, MA 39 two bedroom $ 3,800 – 4,500
1 one bedroom $ 3,000 – 3,000
0 studios N/A
223 Main Street 0 three bedroom N/A 5.43 %
Watertown, MA 93 two bedroom $ 2,700 – 3,000
1 April Lane 0 three bedroom N/A 3.71 %
Lexington, MA 40 two bedroom $ 2,995 – 3,300
2 one bedroom $ 2,450 – 2,500
0 studios N/A
Residential 0 three bedroom N/A 5.61 %
Boston, MA 38 one bedroom $ 2,350 2,895
0 studios N/A
Hamilton Essex Development LLC Parking Lot
Commercial
81–83 Essex Street
Boston, MA
Hamilton 1025 LLC Commercial Building
Commercial
1025 Hancock Street
Quincy,MA
Brookline,MA 227 two bedroom $ 3,350 – 4,425
0 studios N/A
Current free rent concessions would result in an average reduction in unit rents of $22.43 per month per unit. Free rent amortized in 2025 was approximately $185,000, compared to $53,000 in 2024.
(1) The mortgage balance is stated before unamortized deferred financing costs.
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345 FRANKLIN, 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 Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property 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 December 31, 2025, the balance of this mortgage before unamortized deferred financing costs is approximately $7,994,000. This investment is referred to as 345 Franklin, LLC.
HAMILTON ON MAIN, 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 December 31, 2025, the balance of the mortgage before unamortized deferred finance is $23,589,000.The investment is referred to as Hamilton on Main LLC.
HAMILTON MINUTEMAN, 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. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan was 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was approximately $123,000. This investment is referred to as Hamilton Minuteman, LLC. At December 31, 2025, the balance on this mortgage before unamortized deferred financing costs is $6,000,000. In 2018, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting, although the Partnership has no legal obligation to fund its share of any future operating deficiencies, if needed. This investment is referred to as Hamilton Minuteman, LLC.
HAMILTON 1025, 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 Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. 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. As of December 31, 2025, all residential units were sold. The Partnership still owns the commercial building. This investment is referred to as Hamilton 1025, LLC.
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HAMILTON ESSEX 81, LLC. 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 5.61% 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. In December 2025, $1,000,000 of those reserves were distributed to their partners with the Partnership receiving $500,000. 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 December 31, 2025, 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.
HAMILTON PARK TOWERS, LLC. 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, is a 409 unit residential complex. The purchase price was $129,500,000. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Jameson Brown and his affiliates (“HBC”). The term of the loan was four years with a provision requiring payment in whole or in part upon demand by HBC with six months’ notice. The loan was paid in full in April 2012. The original mortgage was $89,914,000 with an interest rate of 5.57% and was to mature in 2019.
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 pursuant to a Guaranty Agreement dated May 31, 2018.
Hamilton Park Towers, LLC 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 December 31, 2025, the balance on this mortgage before unamortized deferred financing costs is $125,000,000.
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ITEM 3. LEGAL PROCEEDINGS
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.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Each Class A Unit is exchangeable, through Computershare Trust Company (“Computershare”) (formerly Equiserve LP), the Partnership’s Depositary Agent, for 30 Depositary Receipts (“Receipts”). The Receipts are listed and publicly traded on the NYSE MKT Exchange under the symbol “NEN.” There has never been an established trading market for the Class B Units or General Partnership Units.
Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE MKT 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.
Distribution to Limited & General Partners were:
On March 12, 2026, the closing price on the NYSE American for a Depositary Receipt was $65.00. There were 2,749,416 Depositary Receipts outstanding, and 1,337 Units (representing 40,110 receipts) held by 105 registered record holders.
Any portion of the Partnership’s cash, which the General Partner deems not necessary for cash reserves, is distributed to the Partners, and distributions are made on a quarterly basis. The Partnership has made annual distributions to its Partners since 1978. The Partnership made distributions of $144.00 per unit ($4.80 per Depositary Receipt) in 2025. The Partnership made distributions of $96.00 per Unit ($3.20 per Depositary Receipt) in 2024. The total distribution was $16,793,527 in 2025 and $11,244,559 in 2024. In March 2026, the Partnership declared a quarterly distribution of $12.00 per Unit ($0.40 per Depositary Receipt) payable on March 31, 2026.
See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for certain information relating to the number of holders of each class of Units.
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Issuer Purchase of Equity Securities during the fourth quarter of 2025:
Remaining number
Depositary Receipts of Depositary Receipts
Purchased as Part that may be purchased
Average of Publicly Under the Plan
Period Price Paid Announced Plan (as Amended)
Total 4,708
See Note 8 to the Consolidated Financial Statements for information concerning the Repurchase Program.
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ITEM 6. [Reserved]
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ITEM 7. 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. 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 2025 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.
Along with risks detailed in Item “1A Risk Factors” and from time to time in the Partnership’s filings with the Securities and Exchange Commission, some factors that could cause the Partnership’s actual results, performance or achievements to differ materially from those expressed or implied by forward looking statements include but are not limited to the following:
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● Risk associated with the use of debt to fund acquisitions and developments.
● Competition for acquisitions may result in increased prices for properties.
The foregoing factors should not be construed as exhaustive or as an admission regarding the adequacy of disclosures made by the Partnership. The Partnership expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
General
On February 24, 2019, Harold Brown, the owner of 75% of the outstanding voting securities of NewReal, Inc. (“NewReal”), the general partner of New England Realty Associates Limited Partnership, passed away. As a result, the estate of Harold Brown held voting control over the capital stock of NewReal. On January 2, 2024, the estate was settled, with Jameson Brown and Harley Brown each assuming 37.5% ownership in NewReal. As of February 1, 2026, the Brown family related entities and Ronald Brown collectively own approximately 34.7% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Brown family related entities also control 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, the Partnership’s sole general partner. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of the capital stock of NewReal. In addition, Ronald Brown is the President and a director of NewReal and Jameson Brown is Treasurer and a director of NewReal. Moreover, 75% of the issued and outstanding
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Class B units of the Partnership are owned by HBC Holdings LLC, an entity of which Jameson Brown is the manager.The outstanding stock of The Hamilton Company is controlled by Jameson Brown and Harley Brown.
Since the Partnership’s long-term goals include the acquisition of additional properties, a portion of the proceeds from the refinancing and sale of properties were reserved for this purpose. If available acquisitions do not meet the Partnership’s investment criteria, the Partnership may purchase additional Depositary Receipts. The Partnership will consider refinancing existing properties if the Partnership’s cash reserves are insufficient to repay existing mortgages or if the Partnership needs additional funds for future acquisitions.
The vacancy rate for the Partnership’s residential properties as of February 1, 2026 was 4.4% as compared with a vacancy rate of 2.3% as of February 1, 2025. The vacancy rate for the Joint Venture properties as of February 1, 2026 was 2.3%, as compared to 1.9% for the same period last year. Approximately half of the Partnership’s overall vacancy is attributable to Hill Estates, which has several units under renovation, and Mill Street Heights, a new property currently in lease-up.
Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the year. As we move from 2025 into 2026, management expects a rental market with slowing rent growth.
During the fourth quarter of 2025, rents increased on average 4.6% for renewals and decreased on average 4.2% for new leases. For all of 2025, renewal rents increased approximately 5.3% and decreased approximately 0.5% for new leases.
The Partnership purchased a commercial retail property of approximately 20,700 square feet, located at 653 Worcester Road in Framingham, Massachusetts for approximately $10,151,000 on January 18, 2023. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $59,000. From the purchase price, the Partnership allocated approximately $585,000 for in- place leases, and approximately $378,000 to the value of tenant relationships. These amounts are being amortized over 12 and 156 months respectively.
On July 14, 2023, the Partnership purchased a 52 unit mixed use property in the South End neighborhood of Boston, MA comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and approximately 3,400 square feet of commercial space for a purchase price of approximately $27,500,000. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $81,000. From the purchase price, the Partnership allocated approximately $525,000 for in-place leases, approximately $61,000 to the value of tenant relationships and $241,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months, respectively.
On May 30, 2025, the Partnership borrowed $18,664,000 at a fixed interest rate of 5.84%. Proceeds were used to refinance the existing mortgage on Hamilton Highlands. Also on May 30, 2025, the Partnership borrowed an additional $40,000,000 at a fixed rate of 5.99%. Proceeds were subsequently used for the purchase of Hill Estates. Both advances were made from the existing Master Credit Facility as amended with KeyBank.
On June 18, 2025, the Partnership, through its subsidiaries, purchased a mixed-use property comprising 396 residential units and 3 commercial units in Belmont, Massachusetts for $172,000,000. Closing costs were approximately $218,000. Additionally, the Partnership, through its subsidiaries, purchased two commercial properties for $3,000,000 in Belmont, Massachusetts. The property acquisitions were financed through proceeds from the sale of U.S. Treasury bills, additional borrowings on the Master Credit Facility of $40,000,000, and proceeds of an interim mortgage loan of $67,500,000. From the purchase price, the Partnership allocated approximately $4,714,000 for in-place leases, approximately $305,000 to the value of tenant relationships and $1,165,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months respectively.
For the year ending December 31, 2025 consolidated revenue increased by 10.8%, operating expenses increased by 22.3% and Income before Other Income (Expense) decreased by 14.3%. For the fourth quarter of 2025, consolidated revenue increased by 15.7%, operating expenses increased by 44.3% and Income before Other Income (Expense)
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decreased by 43.9%, as compared to the fourth quarter of 2024. Excluding Hill Estates, consolidated revenue increased by 3.1%, operating expenses increased by 4.2% and Income before Other Income (Expense) increased by 0.5%.
On June 16, 2022, the Partnership entered into an amendment to the Facility Agreement. The additional advance under the Amended Agreement is in the amount of $80,284,000, at a fixed interest rate of 4.33%. The Partnership’s obligations under the Facility Agreement are secured by mortgages on certain properties pursuant to certain Mortgage, Assignment of Leases and Rents, and Security Agreement and Fixture Filings.
The Partnership used the proceeds to pay down approximately $37,065,000 of existing debt secured by four properties, along with approximately $854,000 in prepayment penalties. The remaining balance of approximately $42,384,000 will be used for general partnership purposes.
On October 14, 2022, the Partnership refinanced its loan with Brookline Bank on 659-665 Worcester Road, Framingham, MA. The loan extended the maturity until October 14, 2032, at a variable interest rate of SOFR rate, plus 1.7% interest only for two years and amortizing using a thirty-year schedule for the balance of the term. At closing, the Partnership entered into an interest rate swap contract with Brookline Bank with a notional amount equivalent to the underlying loan principal amortization, resulting in a fixed rate of 4.60% through the expiration of the interest rate swap contract. As part of the underlying loan’s earnout provision, on July 10, 2025, the Partnership financed an additional $682,520 at an interest rate of 5.97% that will be conterminous with the existing loan.
On November 21, 2024, the Partnership entered into an agreement for a new $25,000,000 revolving line of credit. The term of the line is for three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a debt yield of at least 8.5%. The Partnership incurred a commitment fee of $125,000. As of December 31, 2025, the Partnership was in compliance with the financial covenants.
The Repurchase Program that was initiated in 2007 has purchased 1,559,409 Depositary Receipts through December 31, 2025, or approximately 36% of the outstanding Depositary Receipts. The Partnership purchased 9,051 Depositary Receipts in 2025.
In March of 2020, the Board of Advisors and Board of Directors unanimously approved an extension of the Repurchase Program until March 31, 2025. On March 12, 2025, the Board of Directors unanimously approved a new extension to the Repurchase Program, authorizing the President and Treasurer to cause the Partnership to repurchase, on the open market or otherwise, including through individually negotiated purchases and through a written trading plan that complies with the requirements of Rule 10b5-1, Depository Receipts and Partnership Units such that (i) the aggregate cost of Depository Receipts and Partnership Units repurchased shall not exceed the lesser of $5 million or 10% of the Partnership’s balance of cash and investment in treasury bills, (ii) no Depository Receipts or Partnership Units shall be repurchased after the date that is 12 months after the effective date of the plan, and (iii) no Depository Receipts or Partnership Units shall be repurchased in excess of $95 per Depository Receipt. The Repurchase Plan requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership Agreement. This repurchase authorization replaces the Partnership’s previous repurchase program. The Repurchase Plan shall be made in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be made in accordance with all applicable laws and regulations in effect from time to time. On March 11, 2026, the General Partner authorized the President and Treasurer to renew the Repurchase Plan for one year.
Management believes that the $25,000,000 line of credit, net cash flow from operations and cash on hand have put the Partnership in position to capitalize on investment opportunities should they reveal themselves in the near future. As always, management continues to weigh investment alternatives of stock repurchase, new property acquisitions and dispositions when considering its cash balances and performance of the portfolio.
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The Partnership has retained the Hamilton Company, Inc. (“Hamilton”) to manage and administer the Partnership’s and Joint Ventures’ Properties. Hamilton is a full-service real estate management company, which has legal, construction, maintenance, architectural, accounting and administrative departments. The Partnership’s properties represent approximately 44% of the total properties and 60% of the residential properties managed by Hamilton. Substantially all of the other properties managed by Hamilton are owned, wholly or partially, directly or indirectly, by the Brown Family related entities. The Partnership’s Second Amended and Restated Contract of Limited Partnership (the “Partnership Agreement”) expressly provides that the general partner may employ a management company to manage the properties, and that such management company may be paid a fee of up to 4% of rental receipts for administrative and management services (the “Management Fee”). The Partnership pays Hamilton the annual Management Fee in monthly installments.
In addition to the Management Fee, the Partnership Agreement further provides for the employment of outside professionals to provide services to the Partnership and allows the General Partner to charge the Partnership for the cost of employing professionals to assist with the administration of the Partnership’s properties. Additionally, from time to time, the Partnership pays Hamilton for repairs and maintenance services, legal services, construction services and accounting services. The costs charged by Hamilton for these services are at the same hourly rate charged to all entities managed by Hamilton, and management believes such rates are competitive in the marketplace.
In 2025, tenant renewals were approximately 73% with an average rental increase of approximately 5.3%. New leases accounted for approximately 27% with rental rate decreases of approximately 0.5%. In 2025, leasing commissions were approximately $914,000 compared to approximately $616,000 in 2024, an increase of approximately $297,000 (48.2%) from 2024. Tenant concessions were approximately $71,000 in 2025 compared to approximately $104,000 in 2024, a decrease of approximately $33,000 (31.7%). Tenant improvements were approximately $3,901,000 in 2025 compared to approximately $3,579,000 in 2024, an increase of approximately $322,000 (9.0%).
Hamilton accounted for approximately 1.4% of the repair and maintenance expense paid for by the Partnership in the year ended December 31, 2025 and 1.3% in the year ended December 31, 2024. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters. Several of the larger Partnership properties have their own maintenance staff. Those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton’s headquarters in Allston, Massachusetts are generally serviced by local, independent companies.
Hamilton’s legal department handles most of the Partnership’s eviction and collection matters. Additionally, Hamilton prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately 42.0% and 42.5% of the legal services paid for by the Partnership during the years ended December 31, 2025 and 2024, respectively.
Additionally, as described in Note 3 to the Consolidated Financial Statements, the Hamilton Company receives similar fees from the Investment Properties.
The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton’s architectural department also provides services to the Partnership on an as-needed basis. In 2025, Hamilton provided the Partnership approximately $1,498,000 in construction and architectural services, compared to $504,000 for the year ended December 31, 2024.
Bookkeeping and accounting functions have been provided by Hamilton’s accounting staff, which consists of approximately 16 people. In 2025, Hamilton charged the Partnership $125,000 per year ($31,250 per quarter) for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of the consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America, requires the Partnership to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Partnership regularly and continually evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties and its investments in and advances to joint ventures. The Partnership bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. The Partnership’s critical accounting policies are those which require assumptions to be made about such matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances. See Note 1 to the Consolidated Financial Statements, Principles of Consolidation.
Revenue Recognition: Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Concessions made on residential leases are also accounted for on the straight-line basis.
Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease amounts are accounted for as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.
The Partnership evaluates the non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues). If both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the predominant component. The Partnership elected an allowed practical expedient. For (i) operating lease arrangements involving real estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income. We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred.
RentalPropertyHeld for sale: When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. The Partnership generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale. If, in management’s opinion, the estimated net sales price, net of selling costs, of the assets which have been identified as held for sale is less than the carrying value of the assets, a valuation allowance is established.
If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying value before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.
Rental Properties: Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or
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loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. Costs directly related to the acquisition, development and construction of rental properties are capitalized. Capitalized development and construction costs include pre-construction costs, development and construction costs, regulatory fees, interest, property taxes, insurance, construction oversight fees, and other project costs incurred during the period of development. The Partnership considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity.
Intangible assets acquired include amounts for in-place lease values above and below market leases and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in- place leases is amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles is amortized to expense over the anticipated life of the relationships.
In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset’s carrying value to determine if a write-down to fair value is required.
Investments in Treasury Bills:Investments in Treasury Bills are recorded at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature. The carrying value of the Treasury Bills is adjusted for accretion of discounts over the remaining life of the investment. Income related to the Treasury Bills is recognized in interest income in the Partnership’s consolidated statement of income.
Impairment: On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties may be impaired. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved.
Investments in Joint Ventures: The Partnership accounts for its 40%-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Joint Ventures, and subsequently adjusted for the Partnership’s share in earnings, cash contributions and distributions. Under the equity method of accounting, our net
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equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses.
The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIE (the “primary beneficiary”). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that equity’s activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.
With respect to investments in and advances to the Investment Properties, the Partnership looks to the underlying properties to assess performance and the recoverability of carrying amounts for those investments in a manner similar to direct investments in real estate properties. An impairment charge is recorded if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property.
Legal Proceedings: The Partnership is subject to various legal proceedings and claims that arise, from time to time, in the ordinary course of business. These matters are frequently covered by insurance. If it is determined that a loss is likely to occur, the estimated amount of the loss is recorded in the financial statements. Both the amount of the loss and the point at which its occurrence is considered likely can be difficult to determine.
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RESULTS OF OPERATIONS
Years Ended December 31, 2025 and December 31, 2024
The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and loss of approximately $21,349,000 during the year ended December 31, 2025, compared to approximately $25,371,000 for the year ended December 31, 2024, a decrease of approximately $4,022,000 (15.9%).
The rental activity is summarized as follows:
Occupancy Date
Residential
Vacancy rate 4.4 % 2.3 %
Commercial
Vacancy rate 7.7 % 1.8 %
Rental Income (in thousands)
Year Ended December 31,
Total Continuing Total Continuing
Operations Operations Operations Operations
Residential percentage 94 % 94 % 94 % 94 %
Commercial percentage 6 % 6 % 6 % 6 %
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024:
Year Ended December 31, Dollar Percent
2025 2024 Change Change
Revenues
Expenses
Other Income (Expense)
Rental income from continuing operations for the year ended December 31, 2025 was approximately $88,401,000, compared to approximately $79,763,000 for the year ended December 31, 2024, an increase of approximately $8,638,000 (10.8%). Excluding revenues from the Hill Estates, 26 Brighton Avenue, and the 90 Concord properties of approximately $6,177,000, there was an increase of approximately $2,461,000 (3.1%).
The Partnership Properties with the largest increases in rental income include Westside Colonial, Hamilton Oaks, Westgate Apartments, Hamilton Green, and School Street, with increases of approximately $257,000, $246,000, $239,000, $207,000 and $198,000, respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.
Total expenses from continuing operations for the year ended December 31, 2025 were approximately $67,847,000 compared to approximately $55,161,000 for the year ended December 31, 2024, an increase of approximately $12,686,000 (23.0%). Excluding expenses from the Hill Estates, 26 Brighton Avenue, and the 90 Concord properties of approximately $9,967,000, there was an increase of approximately $2,719,000 (4.9%). Factors which contributed to the increase were an increase in Operating expenses of approximately $1,340,000 (17.2%), due to increases in snow removal costs and utility expenses, an increase in Repairs and Maintenance expense of approximately $949,000 (7.2%), an increase in Taxes and Insurance of approximately $651,000(6.5%), due to an increase in real estate taxes.
Interest income for the year ended December 31, 2025 was approximately $1,795,000 compared to approximately $4,465,000 for the year ended December 31, 2024, a decrease of approximately $2,670,000 (59.8%). The decrease in the interest income is due to the use of the Investment in U.S. Treasury bills to acquire the Hill Estates, 26 Brighton Avenue, and 90 Concord properties.
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Interest expense for the year ended December 31, 2025 was approximately $18,586,000 compared to approximately $15,457,000 for the year ended December 31, 2024, an increase of approximately $3,129,000 (20.2%). Excluding interest expense for the Hill Estates of approximately $2,244,000, interest expense increased approximately $885,000 (5.7%). The increase was due to the interest expense incurred when the Partnership borrowed an additional $40,000,000 in May, 2025 at an interest rate of 5.99% on the Master Credit Facility.
At December 31, 2025, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.
As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $1,474,000 for the year ended December 31, 2025, compared to net income of approximately $1,282,000 for the year ended December 31, 2024, an increase in income of approximately $192,000 (15.0%). This increase is primarily due to rental revenue of approximately $12,259,000 for the year ended December 31, 2025 compared to approximately $11,689,000 for the year ended December 31, 2024, an increase of approximately $570,000 (4.9%). Included in the income for the year ended December 31, 2025 is depreciation and amortization expense of approximately $2,644,000.
As a result of the changes discussed above, net income for the year ended December 31, 2025 was approximately $6,031,000 compared to net income of approximately $15,661,000 for the year ended December 31, 2024, a decrease in income of approximately $9,630,000 (61.5%).
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Years Ended December 31, 2024 and December 31, 2023
The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and loss of approximately $25,371,000 during the year ended December 31, 2024, compared to approximately $18,815,000 for the year ended December 31, 2023, an increase of approximately $6,556,000 (34.8%).
The rental activity is summarized as follows:
Occupancy Date
Residential
Vacancy rate 2.3 % 0.9 %
Commercial
Vacancy rate 1.8 % 1.0% %
Rental Income (in thousands)
Year Ended December 31,
Total Continuing Total Continuing
Operations Operations Operations Operations
Residential percentage 94 % 94 % 94 % 94 %
Commercial percentage 6 % 6 % 6 % 6 %
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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023:
Year Ended December 31, Dollar Percent
2024 2023 Change Change
Revenues
Expenses
Other Income (Expense)
Rental income from continuing operations for the year ended December 31, 2024 was approximately $79,763,000, compared to approximately $73,892,000 for the year ended December 31, 2023, an increase of approximately $5,871,000 (7.9%). Excluding the net increase in revenue from Shawmut of approximately $1,270,000, there was an increase of approximately $4,601,000 (6.3%).
The Partnership Properties with the largest increases in rental income include Hamilton Oaks, 62 Boylston Street Apartments, Mill Street Gardens, 659 Worcester Road, and 1144 Commonwealth Apartments, with increases of approximately $522,000, $446,000, $393,000, $337,000 and $303,000, respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.
Total expenses from continuing operations for the year ended December 31, 2024 were approximately $55,161,000 compared to approximately $55,666,000 for the year ended December 31, 2023, a decrease of approximately $505,000 (0.9%). Excluding the net change in expenses from Shawmut’s of approximately $953,000, there was a decrease of approximately $1,458,000 (2.7%). Factors which contributed to the decrease were a decrease of approximately $971,000, for the Impairment charge in 2023 for Mill Street Development, a decrease in Depreciation and Amortization expense of approximately $480,000 (0.9%), due to fully depreciated assets, and a decrease in Repairs and Maintenance expense of approximately $340,000 (0.6%), primarily due to a decrease in window, door, and glass repairs.
Interest income for the year ended December 31, 2024 was approximately $4,466,000 compared to approximately $4,487,000 for the year ended December 31, 2023, a decrease of approximately $21,000. The decrease is due to a decrease in interest rates for investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 4.2% to 5.0%.
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Interest expense for the year ended December 31, 2024 was approximately $15,457,000 compared to approximately $15,723,000 for the year ended December 31, 2023, a decrease of approximately $266,000 (1.7%). The decrease is due to the greater amortization of principal for debt with level principal and interest payments.
At December 31, 2024, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.
As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $1,282,000 for the year ended December 31, 2024, compared to net income of approximately $876,000 for the year ended December 31, 2023, an increase in income of approximately $406,000 (46.3%). This increase is primarily due to rental revenue of approximately $11,689,000 for the year ended December 31, 2024 compared to approximately $11,132,000 for the year ended December 31, 2023, an increase of approximately $557,000 (5.0%). Included in the income for the year ended December 31, 2024 is depreciation and amortization expense of approximately $2,617,000.
As a result of the changes discussed above, net income for the year ended December 31, 2024 was approximately $15,662,000 compared to net income of approximately $8,454,000 for the year ended December 31, 2023, an increase in income of approximately $7,208,000 (85.3%).
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LIQUIDITY AND CAPITAL RESOURCES
The Partnership’s principal source of cash during 2025 was the proceeds from the increase in mortgage notes payable, the liquidation of U.S Treasury bills, and the collection of rents. The Partnership’s principal use of cash during 2025 was the purchase of a new property, construction of the Mill Street Development project, improvements to rental properties, mortgage principal payments, and distributions to partners.
The Partnership’s principal source of cash during 2024 was the collection of rents, and interest income generated from the purchase of Treasury Bills. The Partnership’s principal use of cash during 2024 was the improvements to rental properties, the development of a rental property at Mill Street, and distributions to partners.
The majority of cash and cash equivalents of $26,668,978 at December 31, 2025 and $17,615,940 at December 31, 2024 were held in interest bearing accounts at creditworthy financial institutions.
The increase in cash of $9,053,038 at December 31, 2025 is summarized as follows:
Year Ended December 31,
Cash provided by (used in) financing activities 53,327,645 (3,059,736)
The net increase in cash provided by operating activities is due to various factors, including a change in depreciation expense, a change in income and distribution from joint ventures, and other factors. The net decrease in cash used in investing activities is primarily for the purchase of the Hill Estates, 26 Brighton Avenue and 90 Concord properties, improvement of rental properties, including the Mill Street Development project, offset by the proceeds of U.S. Treasury bills. Financing activities include proceeds from the mortgage notes payable, mortgage principal payments and distributions to partners, and repurchase of depositary receipts.
During 2025, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $30,691,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. Cash reserves used for the Mill Street Development Project were approximately $17,599,000 for the year ended December 31, 2025. Beyond the Mill Street Development Project, the most significant improvements were made at 62 Boylston, 1137 Commonwealth, Executive Apartments, Clovelly Apartments, Hamilton Oaks, and Captain Parker, at a cost of $2,065,000, $1,980,000, $903,000, $879,000, $799,000, and $733,000, respectively. The Partnership plans to invest approximately $17,069,000 in capital improvements for all properties in 2026.
On December 23, 2025, the Partnership closed a $17,500,000 loan in association with the project, with Brookline Bank at an interest rate of 5.67% interest only with a two year term. As of December 31,2025, the Partnership has invested approximately $35 million in the Mill Street Development project.
Line of Credit
On November 21, 2024, the Partnership entered into an agreement for a new $25,000,000 revolving line of credit. The term of the line is for three years with a floating interest rate equal to a base rate of the SOFR Rate for a period of one month plus the applicable margin of 2.5%. The loan covenants include a leverage ratio not to exceed 65%, a debt service coverage ratio of not less than 1.5 to 1.0, maximum usage of 1.5 times trailing 12 months EBITDA, minimum liquidity of $15 million, and a debt yield of at least 8.5%. The Partnership incurred a commitment fee of $125,000. As of December 31, 2025, the Partnership was in compliance with the financial covenants.
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The line of credit may be used for acquisition, refinancing, improvements, working capital and other needs of the Partnership. The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.
The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 29 of its subsidiary properties and joint ventures. Pledged interests are 49% of the Partnership’s ownership interest in the respective entities.
The Partnership anticipates that cash from operations and interest bearing accounts will be sufficient to fund its current operations, pay distributions, make required debt payments and to finance current improvements to its properties. The Partnership may also sell or refinance properties. The Partnership’s net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, increases or decreases in rental income or expenses, or the loss of significant tenants.
Off-Balance Sheet Arrangements—Joint Venture Indebtedness
As of December 31, 2025, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, which all have mortgage indebtedness except Hancock 1025, and Hamilton Essex Development. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At December 31, 2025, our proportionate share of the non-recourse debt before unamortized deferred financing costs related to these investments was approximately $74,898,000. See Note 15 to the Consolidated Financial Statements.
Contractual Obligations
As of December 31, 2025, we are subject to contractual payment obligations as described in the table below.
Payments due by period
Contractual Obligations
Long -term debt
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 Partnership has no other material contractual obligations to be disclosed.
ITEM 7A. 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 December 31, 2025, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $705,827,000 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
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Partnerships and the Investment Properties collectively have no variable rate debt as of December 31, 2025. The increase or decrease in fair value of the Partnership’s fixed rate debt as of December 31, 2025 would be approximately $27,600,000 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 14 to the Consolidated Financial Statements — “Investment in Unconsolidated Joint Ventures.
For additional disclosure about market risk, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results”.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Partnership appear on pages F-4 through F-41 of this Form 10-K and are indexed herein under Item 15(a)(1).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. We have evaluated the design and operation of our disclosure controls and procedures to determine whether they are effective in ensuring that the disclosure of required information is timely made in accordance with the Securities Exchange Act of 1934 (“Exchange Act”) and the rules and forms of the Securities and Exchange Commission. This evaluation was made under the supervision and with the participation of management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of our General Partner as of the end of the period covered by this annual report on Form 10-K. The CEO and CFO have concluded, based on their reviews, that our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e), are effective to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
Management’s Report on Internal Control over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15-15(f) under the Exchange Act. We assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control—Integrated Framework (2013)”. Based on that assessment and those criteria, our management, with the participation of the CEO and CFO of the General Partner concluded that our internal control over financial reporting is effective as of December 31, 2025.
We believe that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The effectiveness of the Partnership’s internal control over financial reporting as of December 31, 2025 has been audited by Miller Wachman LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fourth quarter of 2025 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION
Director and Officer Trading Arrangements
During the three months ended December 31, 2025, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS
Not Applicable
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
New Real, a Massachusetts corporation and our General Partner, was owned, as of December 31, 2023, by the estate of Harold Brown and by Ronald Brown. The estate was closed on January 2, 2024, whereupon the capital stock of NewReal previously owned by the estate of Harold Brown were transferred to JPB Real Estate LLC and Maisie Brown LLC, entities controlled by Jameson Brown and Harley Brown respectively, with each entity acquiring 37.5% of the voting control of NewReal at that time. Harold Brown and his brother Ronald Brown were individual general partners of the Partnership until May 1984, when NewReal, Inc. replaced them as the sole General Partner of the Partnership. The General Partner is responsible for making all decisions and taking all action deemed by it necessary or appropriate to conduct the business of the Partnership.
The General Partner engages The Hamilton Company to manage the properties of the Partnership and its Subsidiary Partnerships. Hamilton is wholly owned by JPB Real Estate LLC and Maisie Brown LLC, entities controlled by Jameson Brown and Harley Brown, respectively. See “Item 11. Executive Compensation” for information concerning fees paid by the Partnership to Hamilton during 2025.
Because the General Partner has engaged The Hamilton Company as the manager for the Properties, the General Partner has no employees.
The directors of the General Partner are Ronald Brown, Jameson Brown, Martina Alibrandi, David Aloise, Andrew Bloch, Sally Michael, and David Reier. The directors of the General Partner hold office until their successors are duly elected and qualified.
Ronald Brown and Jameson Brown hold all of the executive officer positions of the General Partner.
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The executive officers of the General Partner serve at the pleasure of the Board of Directors. On June 14, 2001, the Board of Directors created an Audit Committee, in accordance with Section 3(a)(58)(A) of the Exchange Act, consisting of three members, and approved the charter of the Audit Committee. As of December 31, 2025, the Audit committee consisted of two members, Martina N. Alibrandi and David Aloise. The Board of Directors has determined that Ms. Alibrandi and Mr. Aloise are audit committee financial experts, as that term is defined in Item 407 of Securities and Exchange Commission Regulation S-K.
The following table sets forth the name and age of each director and officer of the General Partner and each such person’s principal occupation and affiliation during the preceding five years.
Name and Position Age Other Position
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Name and Position Age Other Position
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Name and Position Age Other Position
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers, and persons who beneficially own more than 10% of our Class A Common Stock to file reports of ownership and changes in ownership with the SEC. Based solely on our review of copies of such reports furnished to us and written representations from our directors and executive officers, we believe that during the fiscal year ended December 31, 2025, all Section 16(a) filing requirements applicable to our directors, executive officers, and greater-than-10% beneficial owners were complied with, except that Form 4s filed by Ronald Brown and Jameson Brown reporting repurchases by the Partnership of Class B Units and General Partnership Units on June 30, 2025 and October 2, 2025 were each filed one day late.
CODE OF ETHICS
The Partnership, its General Partner and Hamilton, the Partnership’s management company, have adopted a Code of Business Conduct and Ethics, which constitutes a “Code of Ethics” as defined by the Securities and Exchange Commission and applies to executive officers as well as to all other employees. A copy of the Code of Business Conduct and Ethics is available in the “NERA” section of Hamilton’s website at www.thehamiltoncompany.com. To the extent required by the rules of the SEC, the Partnership and its related entities will disclose amendments to and waivers from the Code of Business Conduct and Ethics in the same place on the aforementioned website.
INSIDER TRADING POLICY
The Partnership is committed to promoting high standards of ethical business conduct and compliance with applicable laws, rules and regulations. As part of this commitment, the Partnership has adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of the Partnership's securities by all covered persons of the Partnership that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Partnership. A copy of the Partnership's Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee of NewReal Inc., the General Partner, is currently comprised of David Aloise, and Martina Alibrandi, each of whom is an independent director of NewReal. The Audit Committee operates under a written charter. In March 2022, the Audit Committee charter was amended to clarify that the Audit Committee may consist of two members if a two member committee is permitted under applicable securities laws and the listing standards of the exchange on which the Partnership’s securities are listed. The listing rules of the NYSE MKT Exchange permit smaller reporting companies such as the Partnership to maintain an audit committee with two members.
The Partnership’s management, which consists of the General Partner, is responsible for the preparation of the Partnership’s financial statements and for maintaining an adequate system of internal controls and processes for that purpose. Miller Wachman LLP (“Miller Wachman”) acts as the Partnership’s independent auditor and is responsible for conducting an independent audit of the Partnership’s annual financial statements and the effectiveness of the Partnership’s internal control over financial reporting as of December 31, 2025 in accordance with the standards of the Public Company Accounting Oversight Board (United States), and issuing a report on the results of their audit. The Audit Committee is responsible for providing independent, objective oversight of both of these processes.
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2025 with management of the Partnership and with representatives of Miller Wachman. As a result of these discussions, the Audit Committee believes that the Partnership maintains an effective system of accounting controls that allow it to prepare financial statements that fairly present the Partnership’s financial position and results of its operations. Discussions with Miller Wachman also included the matters required by Statement on Auditing Standard No. 16 (Communications with Audit Committee).
In addition, the Audit Committee reviewed the independence of Miller Wachman. We received written disclosures and a letter from Miller Wachman regarding its independence as required by Independent Standards Board Standards No. 1 and discussed this information with Miller Wachman.
Based on the foregoing, the Audit Committee has recommended that the audited financial statements of the Partnership for the year ended December 31, 2025 be included in the Partnership’s annual report on form 10-K to be filed with the Securities and Exchange Commission.
David Aloise
Martina Alibrandi
ITEM 11. EXECUTIVE COMPENSATION
The Partnership does not have “Executive Compensation.” As more fully described below, the Partnership employs The Hamilton Company, a management company, to which it pays management fees and administrative fees.
The Partnership is not required to and did not pay any compensation to its officers or the officers and directors of the General Partner in 2025. As more fully described below, the Partnership employs The Hamilton Company, which is solely responsible for performing all management and policy making functions for the Partnership. The only compensation paid by the Partnership to any person or entity is in the form of management fees and administrative fees paid to the General Partner, or any management entity employed by the General Partner, in accordance with the Partnership Agreement.
Specifically, the Partnership Agreement provides that the General Partner, or any management entity employed by the General Partner, is entitled to a management fee equal to 4% (2% at Dexter Park and 3% at Linewt and Hill Estates) of the rental and other operating income from the Partnership Properties and a mortgage servicing fee equal to 0.5% of the unpaid principal balance of any debt instruments received, held and serviced by the Partnership (the “Management Fee”). The Partnership Agreement also authorizes the General Partner to charge to the Partnership its cost for employing professionals to assist with the administration of the Partnership Properties (the “Administrative Fees”). The Administrative Fee is not charged against the Management Fee. In addition, upon the sale or disposition of any